How bad is the national debt? | Bob Murphy | Just Asking Questions, Ep. 39

Economist Bob Murphy explains the technical details of government debt and why Modern Monetary Theory is so dangerously wrong.

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How bad is the national debt? Just asking questions.

Our national debt—measured as federal debt held by the public—is over $27 trillion. That's approaching 100 percent of annual gross domestic product, which is higher than it's been since the end of World War II. So, are we screwed? 

Or are those of us who worry about numbers like this totally misunderstanding the nature of government debt? There's a school of thought called Modern Monetary Theory (MMT) that says economists should stop worrying and learn to love the debt because, when you think about it, the government's deficit is a private sector surplus. This is what MMTers believe.

Joining us to talk about the debt, the rising influence of MMT, and the likely trajectory of an increasingly debt-burdened country is Bob Murphy. He's an economist and author, senior fellow at the Mises Institute, and host of The Bob Murphy Show and The Human Action Podcast.

Sources referenced in this episode:
Federal Debt Held by the Public | St. Louis Fed https://fred.stlouisfed.org/series/FY...
⚪️Federal Debt Held by the Public as Percent of Gross Domestic Product | St. Louis Fed https://fred.stlouisfed.org/series/FY...
⚫️Real Gross Domestic Product | St. Louis Fed https://fred.stlouisfed.org/series/GD...
⚪️Federal government current expenditures: Interest payments | St. Louis Fed https://fred.stlouisfed.org/series/A0...
⚫️ Federal spending | U.S. Treasury Fiscal Data https://fiscaldata.treasury.gov/ameri...
⚪️Just Asking Questions with Ted Nordhaus    • How bad is climate change? | Ted Nord...  
⚫️Just Asking Questions with Kyla Scanlon    • What’s actually wrong with the econom...  
⚪️ Reason TV: "Does National Debt Still Matter? America's Gamble"    • Does National Debt Still Matter? Amer...  
⚫️ Stephanie Kelton: "The big myth of government deficits" | TED    • Stephanie Kelton: The big myth of gov...  
⚪️Murphy's original 2011 refutation of MMT https://mises.org/mises-daily/upside-...
⚫️Free digital version of Murphy's book, Understanding Money Mechanics https://mises.org/understanding-money...
⚪️The Bob Murphy Show's MMT archive https://www.bobmurphyshow.com/captiva...
⚫️Murphy hosts Reason's Nick Gillespie on The Human Action Podcast https://mises.org/podcasts/human-acti...


Chapters:

00:00 Introduction
01:34 What economic story does the debt tell?
05:28 How is this much debt politically feasible?
09:38 Murphy responds to Jason Furman and Keynesianism
14:31 The interest paid on the debt
17:41 Analogizing alarmism: debt vs. climate
26:03 Simple lesson on Social Security and entitlements
32:40 Responding to MMT and Kelton's TED talk
57:41 Why do MMTers seem so fashionable?
01:00:36 Libertarianism: pessimism vs. optimism
01:11:16 Final question