You won’t find anyone who disagrees America is over-indebted. Societally, most just accept federal debt is bad—the bigger the debt, the bigger the bad. But remember, those things accepted without question are often those things most needing investigation.
Most people rationally understand that on a personal level, debt is ok. Some people get into trouble, which isn’t good. But most understand that debt, managed responsibly, is fine. In fact, necessary! Most folks couldn’t buy a house or a car without debt. Heck, most couldn’t buy a suit for that first job interview.
Most readers are probably also ok with corporate debt. Again, we understand some firms handle debt badly. But they have a major incentive not to—if they handle it really badly, maybe the CEO gets fired, which he/she doesn’t want. Maybe shareholders get mad and dump the stock. Or maybe the company goes bankrupt! All situations rational CEOs want to avoid.
But corporations often use debt to do things like build new factories, finance research or buy competitors or complementary businesses to expand. These things all help firms make or increase profits, and we like profitable companies. Profitable companies give us goods and services we want or need at a reasonable price. And they hire! All good things.
But this rational thinking tends to break down when it comes to government debt. We don’t like local government debt, and we ...