Taking out a loan is okay, in the short term, if you have a plan to pay back your loan using income that you plan to obtain in the future but do not have available right now. THe US national debt has grown so large that the interest payments alone are like 20% of the federal budget, and that doesn't even touch the principal. It has reached pyramid scheme levels of borrowing, and no pyrmaid scheme can last forever. One day, lenders will lose confidence in their ability to get their money back and everything will collpase all at once.
In order to prevent that, the budget must be cut. People must be fired. Promising projects must be discontinued. The question is where to make the cuts and how, because cuts in the wrong places in the wrong way will end up making the problem worse. For me, working in healthcare/science/research, I see the cuts to the NIH spending as a bad cut, because it sacrifices a lot of future revenue from scientific R&D. Same with cutting USAID and losing a ton of soft power that could be used to persuade developing countries to let in American companies. Or firing, say, IRS employees, since they're the ones who actually bring in the revenue. So there are good cuts and there are bad cuts, but the point is that eventually cuts must be made.
Well, I must admit that is true, but I guess that 20% of the annual budget going toward interest feels likean impossibly large fraction to overcome. But yes, theoretically, if GDP grew by 300% in the next year, the debt would shrink proportionately, and I would feel much better about not needing to make any cuts. I suppose my concern is that with the nature of the business cycle, we will run into a recession sooner or later, and when that happens, if GDP and tax revenues both go down for a sustained period, then I would worry that lenders would become hesitant to provide additional funding. But I suppose that would be a complicated situation with many other factors, so maybe I am worrying too much.
The debt is being paid off when it’s due, every time, as it always has been. If we want to lower the total debt, cutting spending is not the only option. Money that the government spends increases economic activity and in some cases more than pays for itself in returned revenue. Raising taxes that have been lowered or eliminated since the last time we had a surplus (at the end of Bill Clinton’s presidency) is step one in getting things under control.
The government's debt is not the same type of thing as household debt. Can you elaborate on how you think they are the same? Do you believe there are not other factors besides just credits being less than debits?
Of course there are times when loans are great. However, through boom and bust cycles we have perpetually taken out loans.
So, you need to drill down, are the things we are spending on “capital improvements” for a better future or our operating expenses.
Interest? Military? Medicaid/care? Those will be expenses forever.
If you take anti cyclical view of it, when the stock market is at an all time high we should be paying debt, for when we need it later.