Republicans ... When is the best time to pay off the National Debt?

Answer 1

ASAP

Bush's tax cuts helped the economy grow to a point where if it keeps growing, we'll be able to do it easily. In hindsight, it was a rather lucky move on his part and defies common sense economics.

Answer 2

These discussions rarely include data. Here are the facts:

I've included a link to a publicly available OMB accounting of the national debt as a percentage of GDP from 1944 - 2011 (projected). For comparison, I've also included a link to a list of 114 countries reporting public debt as a % of GDP.

Looking at the OMB chart, one finds that the US debt-to-GDP ratio has fluctuated dramatically over the last 60 years. At the end of WWII it peaked at 122%. It declined to an all-time low of 33% in 1981, and then rose every year through 1996 to a high of 67%. It's currently holding at around 66%.

Looking at the Wikipedia chart, you can see that among developed countries, the US is somewhere in the middle at about a 65% ratio (about the same as France and Germany). Japan is extremely high, with a 158% ratio. And England is somewhat lower with a 43% ratio.

Why all the numbers? I think this discussion requires some historical and comparative perspective. As you can see, the most accepted way to view the national debt is as a % of the GDP.

It's the same way you would assess your personal debt.

Most of us would be very happy if our total debt were 66% of our income. Remember, the National Debt includes short-term obligations (compare to your credit cards or car loans) PLUS long-term debt (compare to your mortgage debt or school loans). If you’re making $50,000 per year and your TOTAL debt were $33,000, I don’t think you’d be ready to declare a personal crisis!

Speaking for myself, I’d much rather see less government spending AND taxation coupled with a gradual reduction of the National Debt. The philosophy of heavy-handed government intervention in the economy (Keynesian) is widely discredited. Milton Friedman would (correctly) advocate free-markets and a laissez faire (hands-off) approach to government intervention in the economy.

Bottom line: Cut spending, hold the line on taxes and let the economy grow, much as it has been doing. The national debt should come down, perhaps by another 5 – 10% over the next 5 years or so. I’d be comfortable with that.

By the way…where were the outraged protests against FDR and Truman in 1945-46 when the national debt reached 122% of our GDP? I think they were too busy supporting our country’s war effort.

We called it Patriotism.

Answer 3

Isn't this a question for both parties?

Neither party, for over 50 years, has done anything to drastically change the current trends in regards to the debt. I know Democrats like to talk about Clinton's surplus, but that only means we did not add as much to the debt as we did the previous year. He did nothing to change the direction in which the debt was, and still is, going.

So, I ask again, when is the best time for either party to pay off the national debt?

Answer 4

The GDP has been increasing at double the rate the deficit has been increasing, so it is not a major problem. But the country cannot afford to continue going further in the red because the economic growth it spurred is starting to peak.

We need to take some of the benefits of the enhanced economy and use it to pay down the debt slowly. Although that will strengthen the dollar abroad and increase the trade deficit as well as slow the economy's growth, if done incrementally no major hiccups are likely as long as the Fed continues to watch interest rates.

Answer 5

We can't pay off the National debt! It far exceeds our ability to pay. All we can do, & thats difficult, is pay on the interest.
In order to pay off the National debt it would cost each & every American $28,000! I don't have it, do you?
Our problem was that we went into debt in the first place. By raising our taxes a small amount we could have paid as we went, provided our representives hadn't run amuck with our money. They spent on padded bills that should never been tacked onto a good bill. Each representive wanted to bring something back to his people to get re-elected. What a shame, they forgot that every bill should benifit all of America & not just their home district!

Answer 6

why are you asking that, their not done running it up and cutting taxes so they can be in denial about the whole mess.

Answer 7

When Democrats are in office, same as last time.