The Macroeconomic Gains from Stabilizing and Reducing Federal Debt



The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year

Koch Document Reveals Laundry List of Policy Victories Extracted From the Trump Administration

The consequences of America’s experiment with huge budget deficits

Orthodox economics suggests two ways in which things could go wrong. When an economy is running at close to full tilt, so that firms are borrowing and investing as much as banks are willing to lend, a government can only borrow by outbidding private firms for financing. Government “crowds out” private activity in such cases, hurting growth. What is more, as debt accumulates, lenders may ask the government to pay higher interest rates to compensate them for the increased risk of default. These higher rates can tip a government into fiscal crisis, as market jitters raise borrowing costs, further spooking markets. The government must then accept draconian austerity policies, higher inflation (as it prints money to cover its bills) or default.

Cato Handbook for Policymakers (8th Edition)

A long list of policy positions and explanations that will give candidates ideas to use for their own positions.

We’re Spending Too Much on Defense

About $700 billion per year

More than the 8 next largest world powers

Cut it in half and you could give every American $900/year

We have bases in 80 countries, with 200,000 deployed troops, costing $150 billion per year

5 facts about government debt around the world

The United States has more government debt than any other country analyzed

As a share of its GDP, Japan’s gross debt far exceeds that of all other nations analyzed

Norway’s GDP far outweighs its net debt

Brazil spends more than any other country analyzed on debt interest payments as a share of revenue

Debt as a percentage of GDP increased in 34 of 43 countries between 2006 and 2016