Media Advisory
IPI Policy Report - # 159 Author: Lawrence A. Hunter, Steve Conover on 07/25/2001
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IPI Experts Available to Discuss Why a
National Debt Can Lead to a Growing Economy
National Debt Can Lead to a Growing Economy
For IMMEDIATE RELEASE: Tuesday, January 8, 2002
Contact: Sonia Hoffman, (703) 912-5742 or shoffman@ipi.org
WHO: Larry Hunter and Steve Conover authors of a new IPI study:
“Who’s Afraid of the National Debt?”
WHAT: There’s no reason for Americans to be debt-phobic if the national debt stays right where it is – at about one-third of national income. In fact, prudently managing debt can be better financially for our economy than balancing the budget, according to a new study released by the Institute for Policy Innovation (IPI).
“Debt is intrinsically neither good nor bad,” says Larry Hunter, co-author of “Who’s Afraid of the National Debt?” and Chief Economist at Empower America. “Sound borrowing generally produces steady long-term growth, greater security, and a higher standard of living than does rushing to pay off the debt at the expense of other more beneficial endeavors.”
For example, if you could borrow money at 6 percent interest and then invest it for a 10 percent return, wouldn’t you do it? It’s no different for the government. In fact, it’s better.
Unlike with individuals or corporations, financial backers like to lend to the U.S. government at the lowest of interest rates because there is little fear that the government will go out of business, because the government does not have to retire principle, and because the government can continuously roll over its debt.
A visionary use of public debt would be to completely overhaul the federal tax system and fundamentally restructure Social Security as a personal investment program. It’s an ambitious goal, but it’s the economically rational thing to do.
WHEN: Available Immediately to radio, print and T.V.
CONTACT: Sonia Hoffman, (703) 912-5742 or shoffman@ipi.org
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