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I think it's non-obvious how this would affect the overall economy. Say you spend $1,000 on loan repayment. That means you spend $1,000 less on other goods. BUT

I think it's non-obvious how this would affect the overall economy. Say you spend $1,000 on loan repayment. That means you spend $1,000 less on other goods. BUT the government now gets $1,000 more income. They need to tax $1,000 less and thus someone else spends $1,000 more on other goods. Thus the net effect is neutral. Of course this is a simple analysis but it shows that it's not straightforward to know what the effects are.

frumper 3y ago
Except the government spending isn’t really connected to taxation. The government spends what it spends and collects taxes for what it levy’s taxes for. It borrows any shortfalls without much afterthought. For any working age adults alive, it’s been very rare we’ve not run a federal deficit.