In 2011, there was a huge uproar over the debt. The GOP was determined to cut spending on entitlements and social programs; to that end, it manufactured a crisis over the debt limit. The MSM collaborated in this by giving lots of publicity to “experts” who told us the sky would fall without cuts. In the end, there was no grand bargain, but there was no disaster, either.
The GOP cut taxes and increased the deficit dramatically during the Trump years. The silence about the debt from the right, the deficit scolds, and the MSM was deafening. Today, however, with a Democrat in the White House and a GOP majority in the House, the MSM are once again taking the issue seriously, even when the first major action of the new reactionary majority was to try to increase the deficit by getting rid of the new IRS agents.
Two observations are pertinent here:
- The MSM should know better than to treat the GOP’s position on debt as a good faith argument, because it is abundantly clear that it isn’t; and
- Debt can be a problem when real (not nominal) interest rates on federal securities become uncomfortably high. Today, nominal interest rates are higher than they were a year or so ago, when money was essentially free, but the inflation that has driven those rates has also reduced the real value of the debt, which results more or less in a wash. As long as the Fed doesn’t raise rates well beyond what appears to be currently contemplated, I don’t see a problem here.