Does Government Debt Matter Anymore? | Perspectives On Policy

Proponents of government spending argue that the government can borrow as much as it wants, so long as the interest rate is less than the rate of economic growth. However, government deficits are far too high for this to be the case. Continuing to run large deficits will either lead to higher inflation or sharp cuts to entitlement programs. Solving the US fiscal problem will require strong pro-growth policies, a slowdown in government spending, and reforms to our chaotic tax system and entitlement programs.

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[DocOrtmeyer]

There is NO WAY the economy outgrows the debt.

[cubsfan]

Politicians will never do this. "after freedom has brought opportunity and some degree of plenty, the competent become selfish, luxury-loving and complacent, the incompetent and the unfortunate grow envious and covetous, and all three groups turn aside from the hard road of freedom to worship the Golden Calf of economic security. The historical cycle seems to be: From bondage to spiritual faith; from spiritual faith to courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to apathy; from apathy to dependency; and from dependency back to bondage once more."

[peterrenda]

This aged well. Now we are in a new era of high inflation and rising interest rates.

[dragonore]

I feel like the Detroit Lions will win three super bowls in a row before the US does the policy solutions prescribed in the video.

[DougParks]

Just such a nice job on this video and I love the clean, slowly sliding graphics.

[armandeepsingh]

The problem with economists supporting the US government debt as good is that they have learn only Economics not history
They think of only a century or so but history has taught us that debt is not good
Debt has led to the collapse of empires

[fcstrength]

The debt is a sign of how much the government is crowding out private sector spending.

[larrysherk]

Continually borrowing against the future is the essence of unsustainability.

[joem]

Tax reform, entitlement reform are easy to say but extremely hard in this divided political environment. It seems deficits, debt, and debt service cost will just get worst and worst until a default is forced upon the govt.

[Rambleon]

The majority of voters will only elect politicians that promise free stuff, so don't expect a fix.
Prepare smartly and get out of the dollars.

[antonioguerra]

Why go they teach financial discipline if it doesn’t matter?

[bradentavelli]

Thank goodness. I was worried this was going to be another new age economist saying debt is good, a crash is impossible since we havent seen one! Yes, leveraging debt is good but that doesn’t inherently mean more debt = better.

[nickronalds]

When it comes to economic policy we're in a weird fairy tale world where a solid consensus, cheered on by dozens of economic Nobel Prize winners, just knows that the Emperor's clothes are just beautiful. Taxes matter only as a tool to punish the rich and the government can spend without limit, without worry, and without consequence. Thanks Professor Cochrane for a clearer-eyed view of the Emperor's scanty attire.

[antonioguerra]

If governments debt doesn’t matter then why not print all individual debt so every citizen can start from zero supporting banks all over again?

[ya-lihsiao]

Very well made video, making it so much easier to catch the point.

[JS-jhcy]

Government does not care, j answer to everything in their views is print more money until the printing press is overwhelming

[northernandyboy]

Interest rates are high now. Great video!

[maryalchester]

This goes to show the essence of credit facility in a thriving economy. Financial advice can never be overstated.

[williams]

those interest payments are gonna matter

[AdrienLegendre]

Simple solution: Change law. Fed Reserve Bank determines when and how much money supply should be increased to maintain economic growth with low inflation. If money supply needs to be increased, Fed Reserve Bank notifies Treasury Department to issue a special government bond that only Federal Reserve Bank can buy. This special bond carries no interest and Federal Reserve Bank determines repayment schedule as needed to regulate money supply. No more government interest payment on debt, so national debt decreases. Major focus should be on economic growth, avoiding waste and fraud, prioritizing spending money on what is important, but not debt.