Yesterday, in an interview with Bloomberg Television, House Speaker John Boehner warned that the U.S. government must balance its budget. After all, he said:
“We have spent more than what we have brought into this government for 55 of the last 60 years. There’s no business in America that could survive like this. No household in America that could do this. And this government can’t do this.”
It’s hard to think of better evidence for the sustainability of budget deficits than the fact that we have run them for 55 of the last 60 years.
This is a brilliant piece by Josh Barro on Bloomberg. His best example is the use of Wal-Mart and its extravagant debt and why the company can continue to grow its debt while growing its bottom line.
It’s the same argument that Warren Buffett has repeatedly used when talking about the national debt: debt analysis is a ratio. The ratio of debt to income was enormously out-of-kilter during World War II. It’s not that way now. In spite of the fact that the Federal debt is larger than it’s ever been, so is the “earning power” of the government.
Save this link and shove it under the nose of the next person who bitches about how large the deficit is and how we’re killing our grandchildren’s futures.