Would the US be better off with zero debt? Are there any positives associated with the national debt?

Answer 1

First, we could not have zero debt, because the Social Security trust fund -- the accumulated result of the fact that Social Security system runs a surplus every year -- represents 45% of the national debt. (Trust fund = debt. Sounds weird but just trust me on that). To pay off that part of the debt would be to eliminate the Social Security trust fund. It's not legally possible, and people would view it as undesirable, to pay that off, even if we had cash on hand to do it. AARP would be rioting in the streets.

But just considering the remaining 55% of the debt, all things being equal, zero debt would be nice I suppose. But all things would not be equal, because that debt has bought us 5 trillion dollars worth of goods and services -- most of which (presumably) have been good and useful (and some of which has been pork. OK.)

There are two approaches to funding the government. 1) coerce taxes from people whether they can afford it or not, and throw them in jail if they don't pay. 2) Politely offer to sell bonds to volunteers who will only purchase them if owning a government bond is in their own best interest.

Approach #2 is a lot nicer. Win-win situation. It does lead to deficits and debt, but I don't see much evidence that it is worse than approach #1.

Answer 2

The United States would be very well off with zero debt, same as you.

Answer 3

Debt is leverage, leverage is good as long as the economy is expanding.

Answer 4

Yes.No.