Brief Notes on the National Debt

Inspired by this:

In fact, the digital counter has been moving so much that it recently ran out of digits to display the ballooning figure: $10,150,603,734,720, or roughly $10.2 trillion, as of Saturday afternoon.
...
"It's symbolic," Stauber, a 40-year-old pilot from Switzerland, said of the counter's lack of space. "It's a very big symbol. It's a complete failure of the system. It's the most powerful country in the world with a conservative government for the last eight years, and it's running the biggest debt ever."

The reaction of Stauber's wife, Roberta, to the escalating debt was more pointed: "It's good for the United States," the doctor said, adding that maybe the country's current predicament would deflate its "ego" and "arrogance."

"You think you are the best country in the world," she continued. "I hope America reflects about this."

Me too, but before the Swiss get too cocky about U.S. public debt consider this...government expenditures as a percentage of GDP were roughly half in the U.S (19.9%) what they are in Switzerland (37.8%). There is plenty of room to argue over the actual numbers, but I doubt you'll find a way to change the order between these two. In short, the Swiss are catching up. Germany, Canada, and France are notables who are ahead of us in both debt and spending as a % of GDP.

Second, about 3 quarters of public debt is held domestically. Again, you can argue over the numbers, but most debt is ultimately staying in the U.S. Meaning? Much of the repayment will be a transfer from U.S. taxpaying households to other U.S. households. Deadweight losses? Yes. Should you be outraged? Maybe, I certainly don't like it but neither am I feeling very apocalyptic about it for the aggregate.

Third, there is probably too much attention on private debt. My student loans (except the Federal subsidized ones) are probably not your problem, just as your car loan is probably not mine. Debt exists because people can pay it back, on average. In the end, debt is a trade that is a positive sum game.