Raise the debt ceiling and pay our bills. Then, to address the elephant in the room. We need to have a frank discussion on what exactly is an acceptable amount of debt for the US government.
I say, “American style” capitalism because there is no such thing as a pure capitalist system, except on paper. Adam Smith and Milton Friedman are probably turning in their graves at the way our capitalist system operates – full of money in politics pulling all sorts of levers resulting in government’s hands interfering with the “free” market. But no lever is bigger than the lever of debt, how it is accessed, utilized and taxed.
Debt can be a powerful instrument of leverage, increasing potential return and/or reducing the cost of capital. The government knows this, which is why interest on debt is tax deductible for businesses. The interest on your mortgage debt is tax deductible. Sales taxes are deductible. Why? To encourage businesses and you to spend. I even remember when interest we paid on our credit card debt was tax deductible. We love debt.
But there is really no way to scientifically prove that any of this happens. It all works fine on paper, but it is impossible to create a controlled experiment in a world where everything is constantly changing. There is no way to do an accurate “after-action” analysis. We try, but there are always countless caveats and variables.Submit a Letter to the Editor
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