this post was submitted on 22 Mar 2024
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Consumer debt and national debt are entirely different
National debt is basically where money comes from in the first place. Unless you are willing to change the most fundamental, basic nature of how modern money even works, you cannot run a (major) country without debt. It's not even just a question of good or bad fiscal policy, it is literally mathematically impossible.
The US was on track to becoming debt free by 2030 under Clinton in 1999. Then Bush was elected and dramatically increased spending while simultaneously giving tax cuts.
Except a nation with no debt and a negative trade balance has negative wealth.
The government debt is the private sector surplus when there a negative trade balance.
The government is literally the source of money. Every dollar created is part of that "debt".
Every dollar is an IOU issued by the federal government that it will be accepted to relieve tax obligations.
" Zero national debt " means zero dollars left in circulation after taxation.
You can't sneak negative trade balance into an argument about public debt.
A nation with no debt has the ability to take on more debt than if it already has debt.
You can have debt for circulation while maintaining a net surplus in all accounts. For example Norway has a per capita debt of $42k USD while maintaining a surplus of $295k USD per capita.
It's similar to how a company like Apple holds debt of $108 B USD while maintaining a $162 B USD surplus.
Which is why the trade balance is crucial when talking about financial assets. Because then all of these are financiall assets in foreign countries.