Federal Deficits Don't Work Like Credit Cards
No matter what you've heard, the national government isn't like a business or household. It operates on a different set of rules.
National debt doesn’t work like a credit card.
Photographer: Joe Raedle/Getty Images
The Joe Biden administration has pledged to deploy fiscal stimulus to get the stricken U.S. economy back on its feet, as well as increase government investment to boost long-run growth. This means the Republican opposition in Congress is back to arguing that austerity is the best way to compensate for the economic damage done by the pandemic.
Even before the election, I wrote about the need for more government spending — a lot more — to hasten a post-Covid recovery. With a Democrat now in charge, fiscal conservatives will be hitting hard on the claim that it's irresponsible to deepen the nation's already-hefty debt. So it's more important than ever for people to understand why some of the more emotionally appealing of those arguments are specious.