re: #183 chunkymonkey

. I *hope* that our economy could grow out of the shadow of that debt, but I’m not convinced this is necessarily so.

the total amount of federal debt has not been reduced in over 50 years, and nobody in washington is talking about paying it down. the last time i heard anybody talk about “paying down the debt” was at the end of the clinton administration after the deficit had been reduced to zero for a couple of years…

the only real effect that the total amount of debt has on the u.s. economy is the amount of interest we pay on it

after the reagan tax cuts in the 80s, the percentage of the federal budget dedicated to interest on the debt went up from the typical 6% to, briefly, in the early 1990s, to 10%

where were you then? were you worried?

currently, the percentage of debt service should be up for a few years, to about 8% i think. 12-15% would be a scary level, but it doesn’t look like we’ll get there

now, keep in mind that in an inflationary universe, fixed interest payments become effectively smaller over time. that’s why a fixed rate mortgage makes good sense for many people. in addition, the government of the united states gets a very good interest rate, something below 1%, i think. fairly quickly, the interest we are paying on the money we borrowed for the iraq war, for the bush tax decreases, for the tarp and for the stimulus will seem smaller and smaller…

now tell me again what it is that you are worried about in regard to the federal debt?