2012: A new year but the same problems...

Why the size of the US debt isn't a problem, per the Noble Prize economist Paul Krugman:

"Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves."

For the entire article, see:

http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?nl=todaysheadlines&emc=tha212