Remember, the U.S. doesn’t have to pay off all its debt, and there’s an easy way to fix it, Nobel laureate Paul Krugman says

5 comments

1. TL,DR everything will be ok if American economy keeps growing. US government can also tax a bit more without hurting the economy, he says.

2. The federal government is going to have to reduce spending and raise taxes, there’s no magic fix to this problem and the longer its put off the more its going to hurt.

3. This post misses the point of why our debt situation is so bad. The real problem is that we have such a high level of debt that, if interest rates rise further, or if they stay elevated for an extended period, our interest payments are going to blow up. Higher interest payments will quickly overwhelm our annual budget, leading to even higher deficits, and thus inflation. We have record debt and record deficits, and we can only keep inflation under control if interest rates stay historically low. It’s very risky. In fact, you’d be foolish to believe it’s going to end well.

   So yeah, we can continue maintaining high debt like Krugman says, but we’re most likely going to face decades of structural inflation that makes everyone poorer. That’s not a win. And it was avoidable if we’d had better fiscal management.

4. Krugman providing the blather to support raising taxes while also printing more money to provide the pincer movement designed to finally kill the middle class through both inflation and increased tax burden.

5. Look up the modern monetary theory. A country that can issue money out of thin air is never truly “in debt”