The Debate Over Debt and Deficits

In Shakespeare’s “Hamlet,” a father gives his son the following advice as the younger heads off to college:

Neither a borrower nor a lender be,

Because loan oft loses both itself and friend

And borrowing dulls the edge of husbandry.

Husbandry, in this context, refers to the control and judicious use of resources.

In America, responsibility for financial husbandry was vested by our founders in the U.S. Congress. Unfortunately, successive editions of the institution have indulged in borrowing that is unparalleled. This year’s candidates for high office are promoting policies that could make matters even worse. Unfortunately, it appears that fiscal responsibility will remain an oxymoron in the United States.

It has been hard for Congress to focus on long-term fiscal policy because the basic task of keeping government open has proven more difficult than it should be. As they battle over continuing resolutions and the debt ceiling, the national debt just keeps on increasing. We now owe more than 100% of our of gross domestic product for the first time in almost 80 years. Projections suggest that level could almost double by the middle of this century. Our essay on how we got into this mess can be found here.

Unsurprisingly, Vice President Harris and former President Trump have been reluctant to consider austerity. Instead, each has offered a menu of proposals that are politically appealing but fiscally worrisome. Third-party projections show that both party platforms will likely add significantly to the national debt.