The left's dangerous notion that debt doesn't matter

The figures are stark. In 1975, government debt per household was roughly equal to half of a typical household’s annual income. Today, it’s 1.7 times. Add entitlements, and the obligations would take a mind-boggling nine years of family income to pay off.

Even deficit hawks like me recognize that with the economy still barely above stall speed, now is hardly the moment for the government to slam on the fiscal brakes, debt or no debt.

So that means there’s no realistic alternative to more debt. But we can reduce the adverse consequences by how we spend this borrowed money. There are two main forms of stimulus: one kind is channeled through tax cuts and then mostly spent, just like a strapped family that puts its monthly expenses onto a credit card. Alternatively, government can direct its resources toward long-term investments that earn a return; think roads and dams but also medical research and education.

At the moment, gridlock grips Washington, and about all that Congress has offered is a two-month cut in the payroll tax, which may help shake the economy out of the doldrums but provides little lasting benefit.