This is the Cato Daily Podcast for Tuesday, March 3rd, 2015.

I'm Caleb Brown.

The debt the US faces is large and growing, and it's not clear that even the recognition of the problem

will change the political calculus of politicians

currently in office.

Economist Antony Davies of Duquesne University argues that only a recognition by voters

that debt payments will come directly from their pockets will change behavior in Washington.

Paul Krugman makes the argument look for individuals getting out of debt that may well be great, but for countries to get out of debt that can

actually be a bad thing and that austerity of many countries all at once can be devastatingly bad and after all we owe the money to ourselves.

Yeah, so there's partial truths here, you know, it's not necessarily true that we're best off being completely out of debt.

In this sense, in this sense he's right, a government is less like an individual than it is a corporation.

Corporations need to maintain a certain amount of debt because what they're doing is borrowing

and using this money to invest, which will provide more profit in the future.

So you can imagine a country doing the same sort of thing.

For example, we borrow today and we invest in a space program.

The space program yields dividends over time. Of course all of this

assumes that you're actually borrowing and then spending the money on something that's going

to yield benefits in the future as opposed to borrowing and

spending it on nonsense right but that's the lesser issue the greater issue in my

mind is this phrase that we owe it to ourselves.

That would be true if the United States were a single individual, right?

Because the individual is borrowed from himself, he owes it to himself, but that's not the

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