The government has about $12 trillion in total debt right now. And that, on its own, is actually okay: It's the rapid growth of entitlements in the future that poses the real problem. Amid all that, a single-year charge of $100 billion is such a vanishingly small addition to our long-term debt that neither including it nor deleting it is going to have any effect on our fiscal condition.
Moreover, I've now been to enough deficit panels and workshops to know that everyone who studies this stuff thinks that the only way we'll actually make any substantial changes to our long-term policies is within the context of a crisis. So in practice, I wonder how much this debate matters in terms of long-term fixes -- the ones that matter -- as opposed to short-term stimulus. Creating a lot of uncertainty about our deficit might be enough to push people away from stimulus, but it seems far from enough to do anything about our long-term deficit.
It seems we're getting the worst of both worlds: The argument over deficits is keeping us from doing what we need to do to help the economy grow right now, but it isn't going to be enough to get us to do what we need to do to help the economy grow later, either. And the outcome of that could be ugly: If growth is anemic when the eventual fiscal crisis does come, that's going to make a response much, much harder.
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