How much national debt is a good thing?


Question/Comment: Paul, please keep up your enlightening NewsHour segments. My question: How much national debt is a good thing? Generational fairness clearly calls for limits, but despite the many voices weighing in on this issue, I have yet to hear a cogent explanation of how much debt we can tolerate without significant consequences on our economy.

Paul Solman: That’s because there isn’t any good benchmark. Some countries run a higher ratio of debt-to-GDP than we do. During World War II, our own ratio was far higher than today.

When you look at future entitlement obligations, however, and the arguable need for major expenditures on, say, education and/or infrastructure, not to mention warfare, our debt level would seem to be a cause for concern. And may well be a reason the U.S. dollar has dropped so violently in value of late.