If Congressman Charlie Dent thinks that the national debt is a problem, then maybe he should have named even one single spending cut he supports in his op-ed calling for spending cuts.
In reality, the debt and deficit are well within control, and are responsible for zero of our current economic problems. We only need $1.2 trillion more in spending cuts and tax increases between now and 2022 to stabilize the debt.
The reason you worry about debt or deficits is the impact on interest rates – that government borrowing could raise interest rates and crowd out private sector investment. That is objectively not happening. The fundamentals of the US economy right now are high unemployment, low inflation, and low interest rates. You worry about the deficit when there is low unemployment, high inflation and high interest rates – the opposite of current conditions.
This all just serves to demonstrate the uselessness of politician op-eds. No self-respecting newspaper should allow this kind of drivel to be printed on its editorial page. If a politician wants to deliver a message to your readers, you make him do it through a Q&A with the Editorial board.
In this case, Editorial board members would surely have pointed out that Congressman Dent’s big scary debt numbers lack any meaningful context. The topline number means nothing – it’s the debt-to-GDP ratio that matters. What is the denominator? Dent doesn’t say. $1 trillion sounds frightening by itself, but it matters how big the economy is. $1 trillion of government debt in a $2 trillion economy would be terrifying, but $1 trillion of government debt in a $100 trillion economy isn’t worth worrying about.
Right now, the US structural deficit – the difference between spending and revenue – is about $325 billion , or 2.1% of GDP. It’s a non-problem.