[nknezek]

The deficit mainly matters because we have to pay interest on the loans we take out. If the rates are good, it's actually a great investment. If the rates are bad, it hamstrings future growth, because now the budget is spent paying back old loans instead of building new things.

Well, why can't we just print money? We can, but it runs the risk of inflation. Inflation is historically low, so yes -- we could totally just print a bunch of money to pay back our debts with relatively little risk of inflation in the short term.

Essentially, debt doesn't matter, except that we have to pay interest. Interest doesn't matter because we print money, except that it might cause inflation. Taxes "destroy" money to dampen inflation. Thus, we can pay off our loans, but that might cause inflation, which might require us to raise taxes not to repay the loans, but to prevent inflation.

[mercutio2]

In other words, we don't have to pay interest, we choose to, because inflation would almost certainly rise substantially if we printed a ton of money, and we're cautious (some might say overcautious) about inflation.

Of course there are some head-scratching rationalizations going around about why gargantuan deficits are good now, a decade into one of the longest economic expansions in living memory, but would have been bad to do when proposed in response to one of the deepest recessions in living memory.

[40acres]

Yes but we also have an instution that controls interest rates, The Federal Reserve! As a poster mentioned earlier, the US also gets really good rates. Turns out being a superpower helps your credit score.

There has been lots of ink spilled with respect to lagging productivity gains and I think the at this point concern about the budget may be a factor. There are enough big problems that can be addressed (infrastructure, health care, homes, etc.) if there was enough government spending to spark to investment and growth.

I'm starting to believe that the real balancing act is a matter of controlling inflation rather than controlling the defecit.