Are they overdoing it? Jimmy Pethokoukis thinks so. The best way to get out of debt is to grow our way out, with less regulation and lower tax rates, but entitlements have to be reformed, and soon.
[Update a while later]
Bad link. Fixed now, sorry.
2 thoughts on “The Republicans’ Obsession With Debt”
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In actual fact, we’re well into the process of inflating the debt away. Inflation reduces the debt in real value while also increasing tax intake due to phoney income increases.
Anybody is delusional if they think the USA can inflate its way out of a sovereign debt of 17,000,000,000,000,000. Actually, it’s the opposite. Each one percent increase in debt service interest rate eats roughly 1/8 of federal gross tax receipts. The feds would be paying more than 100% of current income with interest rates like those paid by the PIIGS (weak Europe).
This is the ONLY reason for the FEDs current 816 BILLION spending per year on “quantitative easing”. As soon as the market forces debt service interest rates up, the fat lady sings. Not surprising considering 40-45 cents of every FED dollar spent is borrowed.