Volume 47, Number 15 · October 5, 2000
Should We Pay the Debt?
By Robert M. Solow
At the end of 1999 the federal debt held by the public amounted to $3,633 billion, or about $15,000 for every man, woman, and child in the population. We will be hearing a lot of big numbers like that during the presidential election campaign, because Mr. Gore has said that if he is elected a principal goal of his administration would be the reduction of the debt, all the way to zero. Mr. Bush, characteristically, hasn't said much about the debt. The Republican members of Congress have spoken favorably of debt reduction, but his and their preference for large-scale tax relief must mean that the fate of the public debt is not their highest priority. Tax reduction and debt reduction are at odds arithmetically; they compete as alternative uses of any given budget surplus. And, as will be seen, they imply quite different priorities about the right way for the economy to use its productive capacity.[1]
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