Tuesday, December 1, 2015

Is the Federal Debt Out of Control? Here is Why it is Not

Note to Readers: Ed Dolan's Econ Blog is back, now that I have finished a time-consuming revision of my econ textbook (to be released soon). Thank you for your patience.
The GOP primary has become an orgy of fear mongering, and not just about immigrants and terrorists. The candidates regularly portray the federal debt, too, as a dire threat to America’s future. Some samples:
  • Marco Rubio: “We have a $19 trillion bipartisan debt and it continues to grow as we borrow money from countries that do not like us to pay for government we cannot afford. . . The time to act is now. The time to turn the page is now. If we — if we don’t act now, we are going to be the first generation in American history that leaves our children worse off than ourselves.”
  • Chris Christie: “We have $19 trillion in debt. . . And we’re talking about fantasy football? Can we stop? . . . Are you concerned like I am that the debt and deficits of Washington, D.C. are endangering America’s future?”
  • Mike Huckabee: “I do not want to walk my five grandkids through the charred remains of a once great country called America, and say, ‘Here you go, $20 trillion dollars of debt. Good luck making something out of this mess.’ ”
  • Rand Paul: “You know, I left my medical practice and ran for office because I was concerned about an $18 trillion debt. We borrow a million dollars a minute. Now, on the floor of the Congress, the Washington establishment from both parties puts forward a bill that will explode the deficit. It allows President Obama to borrow unlimited amounts of money. I will stand firm. I will spend every ounce of energy to stop it. I will begin tomorrow to filibuster it. And I ask everyone in America to call Congress tomorrow and say enough is enough; no more debt.”
An exploding debt certainly sounds scary, but are federal finances that far out of control? Not really. If we look at the numbers, we can see that the debt is far from the dire threat the Republican candidates make it out to be. >>>Read more

Follow this link to view or download a slideshow tutorial with additional examples and charts related to sustainability of the federal debt.

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