In approximately 61 days, conservatives in the US will be in an absolute panic about the financial state of the country.
The US has full ability to pay such debts, at the cost of inflation.
Large deficits would be fine if the spending were for investments with a high ROI, such as infrastructure or nuclear power.
Indeed, going further into debt for an investment with great ROI makes sense. Regardless of the debt level, a good investment is a good investment. And a bad investment is a bad investment.
Alas, most spending of the US federal government isn't an investment of any type.
That point could reasonably be interpreted as rather than taking in a dollar and paying back 50 cents, the US has the power to take in an hour of labour and pay back a half hour. And claim that it fulfilled the terms of the agreement.
That isn't an improvement. It is nothing more than muddying the waters enough it makes it hard to point out that the situation is no different from a default. Which I suppose is why they do it.
There is an amount of stuff in the world at this moment. The US either gives back more stuff than it borrowed, or less. The idea that it can give back less stuff but that is OK because it is a government is a foolish idea. Making it hard to understand who is getting what doesn't magically mean everyone is happy, it just means we only find out who is paying with benefit of hindsight.
Anyone can pay back less real value if they have terms where the rate of interest is lower than the real rate of inflation.
Creditors of a government can mitigate the risk of that happening due to the policies of the debtor government by setting repayment terms other than in fiat currency of the debtor.
They often choose not to; heck, in the case of the US, it's happened that they choose to lend despite negative nominal rates, even before inflation.
Unless you consider being the sovereign issuer of the world's reserve currency, and the military, civil government, legal system, and property rights behind that to be an investment of some type.
Education could be an investment but per student spending has tripled over 50 years, yet it would be hard to argue that there is a high marginal return on investment from the extra spending.
Same with healthcare. Plenty have noted that the US spends more per capita but has worse outcomes. Seems like there's simultaneously cheaper and more effective approaches out there.
Social security is just a transfer payment, but not sustainably structured.
You mean those who actually pay taxes? The top 10% pays 70% of all federal tax.
The most current tax cuts also lowered the brackets in almost all cases, as well as raising the standard deduction. These changes reduced taxes for almost every American.
> In approximately 61 days, conservatives in the US will be in an absolute panic about the financial state of the country.
As opposed to the last 4 years where democrats in the US were in an absolute panic about everything.
> Deutsche Bank’s Torsten Sløk says that the distribution of household wealth in America has become even more disproportionate over the past decade, with the richest 10% of U.S. households representing 70% of all U.S. wealth in 2018, compared with 60% in 1989, according to a recent study by researchers at the Federal Reserve. [1]
[1] https://www.federalreserve.gov/econres/feds/files/2019017pap...