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Did you know that the only time the U.S. federal government was completely debt-free was in 1835 when Andrew Jackson, a Democrat, was president? That's right, and the last time that the federal government had a balanced budget was in 2000 when Bill Clinton, also a Democrat, was president.
Since then, the U.S. has deficit financed two wars in Afghanistan and Iraq, three Republican-sponsored tax cuts that reduced tax rates for corporations, the wealthy and the super-rich, financial bailouts for banks and Wall Street during the Great Recession, spending for expanded benefits for Medicare, Medicaid and Social Security, emergency financial support for state, county and local governments, emergency economic stimulus checks for individuals and families.
The U.S. Survived the Great Depression, the Great Recession and other economic slowdowns as well as several wars, simply by printing currency with deficit financing. Deficits did not stop FDR from implementing the New Deal in the 1930s or fighting World War II in the 1940s.
According to modern monetary theory, there is nothing wrong with budget deficits as long as inflation remains in check and the economy is running smoothly with low unemployment because the national debt is only a debt owed by society to society. This also applies to other countries, such as the UK, Canada, Japan and Australia that print their own currency without worrying about using deficit financing for the nation's debt.
However, it is my opinion that those who benefited the most from deficit financing and increasing the national debt over the last 40-plus years should have their tax rates increased significantly now in order to reduce the national debt without causing a recession.
Taxing lower and middle-income taxpayers would adversely affect the economy because they are the spenders, not the savers. Pushing a key on a Federal Reserve computer to erase the national debt would reward those who are the most responsible for the economic inequality that is worse now in the U.S. than at any other time in American history, in my opinion.
DAVID FAUST
Selinsgrove