Rebuttal to a conservative economist
On Medium, where I write some articles, I follow Dr. Michael Busler, who is an economist and a public policy analyst. He is a Professor of Finance at Stockton University. His op-ed columns appear in Townhall, Newsmax. I follow to rebut his points. As you can see from his media, he has a certain audience. As usual while he cites figures he never has any attribution or footnotes. I generally try to supply footnotes.
Anyway you can read his most recent proopaganda at this link:
What follows below is my initial rebuttal, his response and then my response to that — so far!
Response
As usual Mr Bussler is light and fast with figures scaring the public for no reason.
According to Investopedia the by the end of 2021 the public debt and I put that in quotation marks will be 102% of GDP [1]. Mr Bussler claims public debt as high as it is relative to GDP, but it doesn’t say why. He presents it as if it’s axiomatic with no supporting attribution. Yet there is strong evidence he is completely wrong. “governments in good standing generally don’t repay debt, they refinance it. So what really matters is the debt service cost. To be sustainable, debt interest must be comfortably payable from current income. For a country, therefore, public debt is sustainable indefinitely if the interest rate is equal to or less than the growth rate of nominal gross domestic product (NGDP).” [3]
Edit: Per Paul Krugman “government debt, which, I can’t help mentioning, was much higher relative to G.D.P. at the end of the Napoleonic Wars than it is today” [5]
First one must see what the debt is owed to [2]. Approximately 1/3 is only owed to overseas investors who likely bought US Treasury bonds. Similarly another third is owed to us investors for the same reason.
11% of the debt is owed to the Federal Reserve and 27% is owed to the government itself. This last segment is more about social security and other funds like that. So one-third of the so-called debt is literally ledger items- moving numbers from one column to another internally.
Notice how people like Mr. Bussler always complain about the debt when they’re not in charge and when is being used to help regular people rather than the wealthy or corporations. Apparently we can’t have decent infrastructure, affordable child care or health care if it causes debt, but we can have debt if it means corporations can use tax cuts for stock buy-backs.
Finally, the debt ceiling is a false metric implemented in 1917 and is used as a weapon between the parties. Failure to raise the debt ceiling means we won’t pay bills we have already incurred, much like walking out of the restaurant after you’ve already eaten dinner. It has nothing to do with future spending much like walking out now has nothing to do with going to a restaurant tomorrow. The debt ceiling is likely unconstitutional in my opinion anyways since Congress already authorized the spending. “The Fourteenth Amendment’s Public Debt Clause mandates that all the government’s financial obligations be met” [4] Biden and Yellen should just ignore the debt limit.
[1] https://www.investopedia.com/updates/usa-national-debt/
[2] https://www.marketwatch.com/story/heres-who-owns-a-record-2121-trillion-of-us-debt-2018-08-21
[5] https://www.nytimes.com/2021/10/05/opinion/low-interest-rates-monetary-policy.html
From Mr. Bussler
The public debt is currently $28.5 trillion. That limit was reached on July 31. Yellen used other money that was approved but not spent for other programs. Given that another $250 deficit was incurred monthly in Aug, Sept, Oct the total is now about $29.3 trillion. By year-end, it will be $30 trillion. GDP this year is about $21.5 trillion, meaning the debt is 139% of GDP. The 105% number you are citing was given by Janet Yellen as the debt held by the public. That number is about $22 trillion, or about 105% of GDP, since the federal reserve just increased the money supply to purchase $8 trillion. But the total debt is approaching $30 trillion in total. My facts are correct.
My rejoinder:
Your numbers may be accurate but your assessment and analysis are not. If I said a sandwich was 20% fat, you could say it was 80% nonfat. Both facts would be right but wouldn’t tell you whether the sandwich was actually good for you or not.
Your assessment analysis are nothing more than typical Republican talking points when a Democrat is in the White House. Nobody worried about debt ceilings and debt and deficit when Trump was making corporate tax cuts. You say things like “the debt is 139% of GDP. “ So what? simply saying it doesn’t necessarily mean it’s a bad factor- you just want people to think it is for your own propaganda purposes without any kind of attribution.
The debt ceiling is irrelevant and should be eliminated. Republicans are only using it to stop programs that’ll actually help regular people
Congress already authorized the spending for those debts the debt-ceiling being held back will stop us from paying bills already committed. as I said before it’s like walking out on a restaurant after you’ve eaten dinner and refusing to pay the bill! it does nothing to stop future dining out
Biden should just ignore the debt ceiling and pay the bills. the debt ceiling is very likely unconstitutional anyways based on the 14th Amendment.
We will see if he comes back with another response
Originally published at http://dennisbmurphy.blogspot.com.
