There is nothing wrong with deficits. The only question is whether the debt service is tolerable. In fact, businesses commonly run borrow in preference to raising prices or diverting profits, when they make capital expenditures designed to increase their profitability in the long run. It makes sense in circumstances where renting might make sense, but it allows one to build equity. Even if there is depreciation, the fact that one has real assets backing the borrowing means that interests rates are low, and that, in an emergency, the debt can be retired by the selling off of assets. The same situation applies to the government. It makes sense to avoid the raising of taxes or using a meat cleaver to cut services, by borrowing for capital expenditures, especially in areas like education, where improvement can be expected to affect GDP. Bonds carry reasonable interest rates, and the government holds many assets that could be liquidated if need be, in a financial emergency.
I do not believe that Republicans are especially inclined to corporate welfare. But the check on that is not a divided government, but the competition of an election. In other words, if the Republicans mess up, the Democrats can use it as an issue to defeat them. Why make it so difficult to get a decision on anything, if it is not necessary for accountability.......... |
