At $32 Trillion, Why Deficits And Debt Matter

Rising US debt and deficits are hindering economic growth. Despite the Keynesian theory advocating deficit spending to boost economic activity, the shift from productive investments to social welfare and debt service yields negative returns. This leads to an increasing reliance on debt to fuel growth, pulling resources away from investments to service debt and social welfare. To reduce debt to manageable levels, a $50 trillion cut from the current debt would be required, potentially triggering major economic downturns. Persistently high debt levels may result in frequent recessions, lower market returns, and a stagflationary environment.