If a countries economy outgrows the debt the debt shrinks and results are positive.
Yes, this is why it’s worthwhile for the government to take on debt to invest in the economy. If the government, say, builds a state-run grocery store, that store will grow the economy, potentially at a fast enough rate to offset the interest on the debt. This creates a “virtuous cycle” where taxes generate social spending, which generates economic growth, which generates more tax revenue.
I understand that completely.
This does not mean that there’s no problem with the government wracking up massive debt by, rather than building grocery stores or things like that, by throwing a bunch of money into a giant hole in the ground and setting it on fire. Which is exactly what military spending is. Spending a trillion dollars a year to build absurdly expensive bombs to drop on random Middle Easterners for no reason and to accomplish nothing adds as much to the economy as paying people to dig a ditch and then fill it back in. It is a complete waste of money, or, more accurately, it is a process of transferring public funds into the private hands of the military industrial complex (where plenty of politicians coincidentally own shares). The massive debt that we’ve accumulated through this wasteful, corrupt spending has not been the result of investing in a virtuous cycle. Yes, there is some economic stimulation from paying people to make bombs but it is much, much less than we would get from paying people to build trains or stores or really anything that actually provides a lasting benefit.
Yes, this is why it’s worthwhile for the government to take on debt to invest in the economy. If the government, say, builds a state-run grocery store, that store will grow the economy, potentially at a fast enough rate to offset the interest on the debt. This creates a “virtuous cycle” where taxes generate social spending, which generates economic growth, which generates more tax revenue.
I understand that completely.
This does not mean that there’s no problem with the government wracking up massive debt by, rather than building grocery stores or things like that, by throwing a bunch of money into a giant hole in the ground and setting it on fire. Which is exactly what military spending is. Spending a trillion dollars a year to build absurdly expensive bombs to drop on random Middle Easterners for no reason and to accomplish nothing adds as much to the economy as paying people to dig a ditch and then fill it back in. It is a complete waste of money, or, more accurately, it is a process of transferring public funds into the private hands of the military industrial complex (where plenty of politicians coincidentally own shares). The massive debt that we’ve accumulated through this wasteful, corrupt spending has not been the result of investing in a virtuous cycle. Yes, there is some economic stimulation from paying people to make bombs but it is much, much less than we would get from paying people to build trains or stores or really anything that actually provides a lasting benefit.