Yep. Debt is an investment to increase taxable value later to make up for it. It’s also mostly owned by Americans, so the money paying for debt is going back into the economy, which is then creating more taxable value. As long as debt is used to make more money later, it isn’t bad. People understand this on a personal level (taking on debt to open a business can be a good decision, for example), but they been mislead by some people that for a nation it’s bad. They say this for a reason though, and it isn’t because they actually think debt is bad.
I developed this intuition for myself that I think kinda works. I think of govt debt a bit like stock investment in a large corporation. People “put money” in it because they believe it delivers returns and will keep delivering returns. And as you said, this is actually much easier for the government to do than a corporation as simply the fact of releasing the money into the economy generates returns. So instead of thinking about the size of the debt, one should be thinking about the ability of the government to function well. Ironically, it seems like this is also the way the market looks at it. It keeps throwing money at it and it only knocked off its credit rating due to the threat of dysfunction around the debt ceiling.
Yep. Debt is an investment to increase taxable value later to make up for it. It’s also mostly owned by Americans, so the money paying for debt is going back into the economy, which is then creating more taxable value. As long as debt is used to make more money later, it isn’t bad. People understand this on a personal level (taking on debt to open a business can be a good decision, for example), but they been mislead by some people that for a nation it’s bad. They say this for a reason though, and it isn’t because they actually think debt is bad.
I developed this intuition for myself that I think kinda works. I think of govt debt a bit like stock investment in a large corporation. People “put money” in it because they believe it delivers returns and will keep delivering returns. And as you said, this is actually much easier for the government to do than a corporation as simply the fact of releasing the money into the economy generates returns. So instead of thinking about the size of the debt, one should be thinking about the ability of the government to function well. Ironically, it seems like this is also the way the market looks at it. It keeps throwing money at it and it only knocked off its credit rating due to the threat of dysfunction around the debt ceiling.