Wondering if the federal debt matters? These articles are for you

  • The WSJ breaks the debt down
  • A think tank says we can't ignore this
  • A famous economist shares his take

The WSJ breaks the debt down

#1: Check out The Wall Street Journal’s “What the $18 Trillion National Debt Means for the U.S. Economy.”And notice this key chart from the article:

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A think tank says we can't ignore this

#2: Next, from the Brookings Institute: “The federal debt is worse than you think.”  A key quote: 

“Of all the failures of recent Congresses and Presidents, none is more important than their failure to deal with the nation’s long-term debt. Although Congress tied itself in knots trying to address the problem, the growth of debt remains, in the words of the Congressional Budget Office, ‘unsustainable.’”

And learn about the difference between the deficit and a fiscal gap (hint: they both show we have a huge problem): 

“Under the CBO estimates used by Congress, we have a huge debt hole. Under the more comprehensive fiscal gap measurement, we have a chasm. But little if any Congressional action is planned to deal with the notorious level of debt. We’re headed toward a fiscal black hole.”

 

A famous economist shares his take

#3: Read Economist Keith Hennessey’s important blog post: “Why high government debt is a problem.” A point worth paying attention to:

“Government debt is twice as large a share of the economy as it was before the financial crisis. In addition to increasing the risk of another catastrophic financial crisis, high government debt squeezes out other functions of government, creates pressure for higher taxes, leaves policymakers less able to respond to future recessions, wars, and terrorist attacks, and lowers future wage growth. This problem will only increase as entitlement spending growth kicks into high gear a few years from now, but simply stabilizing debt/GDP in the mid 70s is an insufficient goal. Don’t rest on your laurels because deficits are smaller than they used to be. High government debt is a big problem.”