Growth

Everyone agrees that the national debt presents a serious problem to the long-term health of the economy. There are four ways to reduce the debt or at least keep it from rising faster than inflation. The first two are obvious. Increase taxes or decrease spending. Neither of these are effective. Experience has shown that when government revenues increase the money is not used to pay down debt but to initiate new programs to gather new votes. Congress is unable to reduce spending for fear of losing votes so that leaves two ways. The best way is to grow the economy by increasing productivity. This provides new revenue without increasing inflation. The other way is to increase government spending at a slightly lower rate than inflation. Both of these ways are long term solutions taking as many years to bring the debt to zero as it took to get the debt we have today, which means about 75 years. Right now, the government is trying to grow the economy by bringing jobs back home. Whether this will work remains to be seen.