Noah Smith, Columnist

Debt Keeps Rising and Nothing Bad Happens

Economists are stumped.

October 2, 2017 at 12:39 PM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

The answer was clearer back then.
Source: Bettmann/Getty Images

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As the Republicans prepare for their big tax reform push, the issue of deficits and debt is once more coming to the fore. Many economists realize that tax cuts, especially income tax cuts, tend to increase deficits, which over time lead to increases in the national debt. The GOP plan, if adopted, probably would pump up both deficits and debt. This isn’t the first time that’s happened, of course -- Presidents Ronald Reagan and George W. Bush also cut taxes and deficits swelled:

So the question is: Is more debt good, bad or does it even matter? But if it’s bad, how serious a problem is it?