Government Debt is Currently Cheaper Than Cash
Right now, it's more prudent for the Federal government to borrow money than to pay cash.
The graph above, which I snagged from Karl Smith, illustrates the point that concern for the deficit at this point in time is simply absurd. This is a graph of interest rates on Federal debt. You will note that at this time, interest on Federal debt is actually negative.
Let that sit in your mind for a minute. The interest rate is negative.
That means that right now, it is actually cheaper for the Federal government to borrow money than to spend cash. Which means that it makes more financial sense for the Federal government to borrow money than to spend cash. Which means that all the haranguing about the size of the deficit right now is pointless, because taxpayers are actually getting a better deal by having a deficit than if we had a balanced budget.
No, it won’t be like this forever. Yes, the deficit is a long term problem.
But it isn’t today’s problem. Not by a long shot.