$359 billion is a huge number. And that’s $359 billion every year. Imagine what we could do with that money. We could cut taxes, fix every social problem, and still have money left over to clean up pollution, feed the world, maybe even colonize mars. OK I’m exaggerating but it’s a lot of money
It seems to me that this level of debt interest proves cutting taxes means higher taxes later if it involves borrowing or not paying off debt. We got in this mess by cutting taxes for the rich. We’re digging the hole deeper with the Bush tax cuts. (Just wait until the resulting Social Security bomb goes off, and we have to raise taxes to pay for that.)
It also seems to me that imposing a big fat “pay off the debt tax” now would mean everyone would pay much lower taxes later. Of course, we don’t want to hurt consumer demand so the tax would have to be on the higher brackets. And not on income – as I wrote below we’ll need to be raising the cap on income for Social Security. So it would have to be a tax on wealth, like Ken Lay’s 18 homes, or the other billions that CEOs took while their companies went down in flames. (Get the money FROM where the money WENT.)
Cut taxes now, higher taxes later. Raise taxes now, world prosperity later. I think that paying down this massive debt would help, not hurt the economy.
Maybe an economist will explain why this isn’t a good idea – or at least offer an alternative that pays off this debt. Please don’t write if your income is above $85,000 – I’ll just chalk it up to cognitive dissonance.