Economist: There is no debt crisis

The Real News Network has the interview Economist: There is no debt crisis. Some of this is old news because the debt ceiling crisis is over for a while.  However, the comments about the U.S. debt are worth hearing again.

DESVARIEUX: But you do have those that say that long-term debt is not really in the interests of the country. I know, you know, you cannot compare the United States Treasury to the way a household operates, but at the same time, in the long term we shouldn’t really be accumulating more and more debt. What set of policies do you think would most effectively lower the nation’s debt?

EPSTEIN: Well, one really has to look at this more carefully and see that debt is not really the issue, because after all, debt is just one side of the balance sheet. There’s the liabilities. That’s the debt. But there’s also the assets that you get for the debt.

The big problem for the United States is not the amount of debt that it owes, but it’s the way that it’s been investing in social assets–in education, in infrastructure, in all the things that can make the economy develop properly. There hasn’t been enough investment in green technology and so forth. So we really should be focusing on the investments in the real economy, in the infrastructure and the education. And oftentimes those kinds of investments, they pay for themselves in terms of more and more revenue.

But as the economy grows, the amount of debt relative to the GNP goes down anyway. And I think most economists, including at the Congressional Budget Office and elsewhere, realize that this whole debt is a secondary issue.

So what is the issue? The issue, from the perspective of the Congress, financed by big billionaires, the right-wingers that are financed by big billionaires like the Koch brothers and others, their goal is to completely dismantle those aspects of the government that threaten them. And that includes threaten them with higher taxation, threaten them with environmental regulations, carbon taxes, etc. They want to paralyze the government so it’s not able to impose those kinds of things.

And this debt ceiling fight has gotten out of control. They can’t necessarily control the system, and it’s led to a very dangerous impasse.


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