We wouldn't even need to pay off the whole debt. Having an economist for a father, one gets to learn a few things about markets and money. A reasonable structural debt is actually quite normal--it represents the investment that a nation has made in its future. We see this from the personal level--home mortgages and car loans--things which we plan to receive value from for a long term, and for which we deem it worthwhile to go into debt. Small municipalities, school districts, businesseses, state governments--all typically do managed borrowing. The market can correct for imprudent debtors by calculating credit scores, bond ratings, and the like...as it gets more expensive to borrow, the value calculation changes. All of a sudden it's not worth going into debt to get that expensive car, because no lender will give us the money at a reasonable rate.
The problem is that nation-states--or at least the United States--seems to not have had enough disincentive from rapacious borrowing to deter the hungry appetites of borrow-and-spend politicians.
The trailers for I.O.U.S.A., the overall feeling of financial crisis, including the recent nationalization of Fannie and Freddie to prevent their collapse, definitely has this on my mind all of the time.
$9.6 TRILLION dollars of Federal debt...That can't be good. But what is a healthy federal debt burden in absolute dollars or normalized against something like GDP? How do we get there from here in? What's the Debt Reduction Plan for the U.S.?
Get ready to tighten your belts and whip out your checkbooks...I think it's time to go on a debt diet.