Back under Reagan it was decided that debt was good. Spending was increased, especially on defense, while taxes were cut.
The basic idea was that as debt increased, interest on the debt would crowd out other government programs, causing government to shrink. At some point, the government’s power to tax only results in transferring wealth from the taxpayers to the bondholders.
This was actually the situation in France prior to the Revolution. Debt from the Seven Years War and other misadventures, such as supporting the American War of Independence, consumed the taxation power of the French government.
“Back under Reagan it was decided that debt was good. Spending was increased, especially on defense, while taxes were cut.”
That is the democrat line. Yes, we spent more on defense. But saying taxes were cut is very disingenuous. The heavily mocked Laffer Curve was very real. The idiot GHW Bush called it voodoo economics. The concept was that a high tax rate suppresses the economy. A drastic cut in tax rates results in far more tax REVENUE being brought in.
Bottom line, when Reagan took office in 1980, the US Government took in 517 billion dollars. In 1988 AFTER Reagans tax cut, the government took in 909 billion.
Emotionally, a lower tax rate seems like a smaller piece of the pie. But if lowering it doubles the size of the pie, its a much bigger slice of food.
Whoever came up with MMT should be quartered