From the New York Times
In the nation’s latest fiscal mood swing, the mainstream consensus has swung from “we must extend the Bush tax cuts” (in November and December 2010) toward “we must immediately cut the budget deficit.” The prevailing assumption, increasingly heard from both left and right, is that we already have far too much government debt — and any further significant increase is likely to ruin us all.
This way of framing the debate is misleading — and at odds with the fiscal history of the United States. It masks the deeper and important issues here, which are more about distribution, in particular how much relatively wealthy Americans are willing to transfer to relatively poor Americans.
To think about the current size of our debt, start at the beginning of the American republic. (For a very short history of United States government debt, listen to my conversation last weekend with Guy Raz of National Public Radio; we cover more than 200 years in about three minutes. For more detail, look up the annual debt numbers at Treasury Direct).
Read the full New York Times article
Simon Johnson is Ronald A. Kurtz (1954) Professor of Entrepreneurship and Professor of Global Economics and Management
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