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By balancing the budget we wouldn't be getting rid of debt, we'd be stopping the growth of debt. Ideally, debt should grow at the rate of inflation, but there c
by pitaj 9y ago
By balancing the budget we wouldn't be getting rid of debt, we'd be stopping the growth of debt. Ideally, debt should grow at the rate of inflation, but there can be some large spending times and some low spending times. Debt shouldn't be larger than a significant portion of the economy.
- seanmcdirmid 9y agoWe already have mechanisms to control debt accumulation: raise interest rates if we want to borrow more and lower interest rates if we want to borrow less. Interest rates have been rock bottom, negative if inflation is considered, and the US government has been practically paid to borrow via Treasuries. > Debt shouldn't be larger than a significant portion of the economy. Are you referring to just public debt? It really depends again on saving needs. It really isn't that simple. Debt in itself isn't bad, default on debt is bad. If you had to choose between debt and a depression, unless you are Hoover, you will choose debt.