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(Nitpick: Bond revenues don't pay Social Security, Social Security pays Social Security. Bonds are actually bought with Social Security revenues.) The rest of

(Nitpick: Bond revenues don't pay Social Security, Social Security pays Social Security. Bonds are actually bought with Social Security revenues.) The rest of these investments in the citizenry do pay dividends. Not every investment is a simple matter of buying something which spits out money immediately. Spending on health and education is a long-term investment which returns higher tax revenues. Paying for national defense and caring for veterans is simply paying ourselves, that money continues circulating and yielding tax revenues. Even debt interest is paying ourselves! Most of the debt is internal, which just circulates the money around in the economy. Only something like 20% of debt is foreign owned, and that revenue still often comes back to us in to form of rolled-over bond purchases and trade. In closing, the national debt is only a problem when we stop circulating currency. We can make the debt a huge problem by suddenly slashing productive investments in the deluded belief that we're a poor family which has racked up a big credit card bill.

s1artibartfast 1y ago
RE SS: Social security has already crossed the point where SS expenses exceed SS tax revenue [1]. Interest on bonds purchased with SS tax revenue are paid out of general tax revenue. I see two issues with what you said. First, what matters is the expected return and whether it's prositive. I can sell you an "investment" that pays dividends and raises revenues, but that doesn't mean it is net positive economically. I can spend $100 to raise revenue by $0.01 for 10 years. Is that an investment simply because some nonzero level of return? Second, waving away debt as internal ignores the fact that interest recipients and payers are different. A family with a big credit card bill is also domestic debt and circulation. That is little consolation for the family spending an increasing portion of their budget servicing the debt, nor is it consolation that the money is being circulated by their banker paying their housekeeper. The internal "who" matters, especially when some people can run up the credit and check out before the bill comes do. https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html

s1artibartfast 1y ago

RE SS: Social security has already crossed the point where SS expenses exceed SS tax revenue [1]. Interest on bonds purchased with SS tax revenue are paid out of general tax revenue. I see two issues with what you said. First, what matters is the expected return and whether it's prositive. I can sell you an "investment" that pays dividends and raises revenues, but that doesn't mean it is net positive economically. I can spend $100 to raise revenue by $0.01 for 10 years. Is that an investment simply because some nonzero level of return? Second, waving away debt as internal ignores the fact that interest recipients and payers are different. A family with a big credit card bill is also domestic debt and circulation. That is little consolation for the family spending an increasing portion of their budget servicing the debt, nor is it consolation that the money is being circulated by their banker paying their housekeeper. The internal "who" matters, especially when some people can run up the credit and check out before the bill comes do. https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html