In a recent post for The New York Times‘ Campaign Stops blog, Thomas Edsall asked the question: “Does the national debt—which has now reached a cumulative total of $15.4 trillion—pose a serious threat to the financial viability of the United States?” Edsall describes the split on the left on this question, highlighting Jared Bernstein’s piece, “Rethinking Debt,” in the Winter 2012 issue of Democracy.
On the issue of the debt, Edsall contrasts the unity of opinion on the right versus the divide on the left among those who embrace austerity and those who see debt alarmism as a Trojan horse for unnecessary and politically motivated entitlement cuts.
Edsall cites Bernstein’s piece, titled “Rethinking Debt,” as part of the latter camp. Bernstein argues:
Controlling for the state of the economy and assuming mature capital markets and the ability to service the debt burden (and those are not unrealistic assumptions—they exist in this and most other advanced economies), there’s little empirical evidence that we should be particularly alarmed at “high,” yet stable, levels of federal debt, such as the current U.S. level of around 70 percent of GDP. On the other hand, if you can’t effectively and reliably tax your citizens, as in Greece, any level of debt is a foundational threat.