Dec 1, 2009

The national debt

A lot of people I know have gotten cranked up about the national debt. Sure, it's a big problem, made worse when douchebags like Reagan caused it for no reason. Yet now is not the time to be worrying about it. Krugman sez:
When I was on This Week yesterday, George Will tried his hand at the debt scare thing, saying that we’re in terrible shape because by 2019 the interest on the debt will be SEVEN HUNDRED BILLION DOLLARS. (That should be read in the voice of Dr. Evil). I get that a lot — people who talk about the big numbers which are supposed to imply that things are terrible, impossible, we’re doomed, etc.

The point, of course, is that everything about the United States is big. So you have to interpret numbers accordingly. As the graphic above shows — it’s taken from an article that managed to maintain a grim tone while reporting numbers that actually weren’t all that grim — what we’re talking about is a debt-service burden roughly comparable to that under the first President Bush. How many of the people now warning about the impossible burden of currently projected debt were issuing similar warnings back in 1992? Not many, I’d guess.
That and inflation are the other thing that people should chill out about. Right now we're facing a real possibility of deflation, and that's a problem. A little bit of inflation can help out a country in recession.

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