As I see it the Main Basis of it is the thought that the US national debt is a crushing burden that the Boomers have imposed on all later generations. I can seriously tell you that this Boomer never felt the weight of the $1T national debt that Pres. Reagan inherited from past generations since 1837 when the Revol. War debt was paid off. Nor the later US debt that the Repubs increased.
. . . This is because my tax money was never or rarely used to pay down the debt. Instead the debt was always rolled over on to newly issued bonds . And all interest payments were also paid with newly borrowed $$.
. . . Now, I know that Mainstream (MS) economists will try to tell you that the payments were all made with dollars (=$$) that were collected with taxes. IMHO, this is just smoke and mirrors. All $$ are fungible, this is a fancy word meaning they are all the same. So, when the US Gov. both collects $$ with taxes and borrows $$ by selling bonds, the $$ all go into one pool and are spent from it. IMHO, we can choose to decide which sorts of dollars are being spent on each kind of expense. So, when someone says, “It is not right to spend borrowed $$ on things like welfare,” he is choosing to assign this spending to a category of $$ the Gov. can spend in order to make it seem bad. It's more smoke and mirrors.
. . . You can clearly, I think, see that I'm doing the exact same thing, but bare with me for just a little while. So yes, I'm choosing to put the spending for debt payments and welfare into categories that make such spending sound better.
My 2nd Main Point is that you young people are being lied to when you are told that “someday” you are going to suffer when the US *has to* start paying down the national debt. Yes, I claim this is a lie when it is made by a MS economist. When your friend says this he/she is just buying into the groupthink that surrounds you all.
My 3rd Main Point is that Modern Monetary Theory (MMT) has been used for many years now by Repub. politicians. You can see it in their actions. When a Repub. is Pres. Repubs. in Congress spend like crazy for the Army, etc. and to cut taxes on the rich; but when a Dem is Pres. suddenly the Repuds. in Congress are all worried about the deficit and the total huge national debt. Some Facts are --- when Reagan became Pres. the US debt was $1T, Pres. Clinton had a surplus for 3-4 years, Obama had to spend because Bush II crashed the economy, and Trump has been and now even faster spending like crazy. So, now the US debt is about $24T, or 24 times more than when Reagan became Pres.. And most of it was spent by a Repub. or forced on a Dem by a Repub. (also for 6 of Obama's 8 years Repuds. controlled 1 house of Congress so they voted for every $$ of that spending).
. . . MMT says very clearly that there is a limit on deficit spending and it is when the nation is using *all* the labor and natural resources of the nation or that it can buy. At that point more deficit spending will cause inflation.
. . . OTOH, MMT says that there should be more deficit spending than there has been for the last many years. This is because the Gov. can only create prosperity if the "debtless" money supply grows fast enough to make up for the 2 main leakages and provide more for the growth in the GDP. BTW, the leakages are 1} saving by Americans & Am. corps. and 2} savings made by foreigners who pulled $$ out of America with the trade deficit and didn't buy something from or in America with them. *All* such $$ are functionally saved by some non-American.
. . . So, the US deficit for the next few years should be (IMHO, not the opinion of Prof. MMTers) the total of $$ saved last year PLUS the total trade deficit for last year PLUS some more $$ to provide for economic growth.
My 4th Main Point is that the US has a full fiat currency, both dollars (paper bills and electronic $$) and US bonds are both just IOUs. Paper dollars are only redeemed to pay your taxes and fees; bond dollars also earn interest and can be converted to electronic $$ at maturity. Paying down the US debt with tax $$ has the effect of taking $100 from a taxpayer at “gun point” and giving them to a bond holder who wants a $100 bond and who knows she has a real financial asset. This redeeming of the $100 bond functionally burns it. Before the transaction there were 2 $100 assets (the cash and a bond), after the transaction there is just the $100 in cash left. Paying-off or even down the US debt destroys assets for no reason (now that the world is off the gold standard).
The Repub. politicians know that the US debt will never be paid off again like it was in 1837. And also, the US debt will never be paid down much at all, never as much as 5% of it. MMT explains all this quite clearly.
. . . You might ask, why should I believe that MMT is correct? I have many threads explaining why here on this site under “Political Circus”and “Credit & Debt”. Read some of them.
. . . My reasons for why the US debt can never be paid off are ---
1] The current debt is about $24T, depending on if you include $$ the Gov. owes to itself, like the Soc. Sec. Trust Fund.
2] The only “correct” way to pay the debt off is to use tax $$ to do it. It is not correct to pay it off with $$ it borrows from anyone. It is also not correct to pay the US debt off with $$ from the magic money tree. MMT says it can be paid off with $$ from the magic money tree, but I'll call that cheating here. [BTW, functionally the magic money tree does exist.]
3] OK, this means that the US Gov. would have to run a real surplus of (for example) $500B for 48 years. MMT claims that this would put the US and the world into a recession within 4 years, because the US economy needs that $500B/yr of income. You can see that less austerity in the EU has put Spain, Italy, etc. in a recession for the last 12 years. Austerity always does this. MMT explains why.
4] OK, who in America is going to pay the $500B per year? The rich and super rich do NOT want it to be them. The poor don't have $500B/yr to take from them. And I don't think the Middle Class does either. Only the super rich have this kind of money and they will NOT let the new taxes fall on them.
5] The UK, aka England, has had a national debt in every year since 1694, i.e. for 325 straight years. And despite graphs that show the debt as % of GDP going down in some years, actually the UK has has a real surplus in very few of those 325 years. So, the “someday” to pay it off, has never come, not even when the UK lost its Empire between 1946 and 1965. [Losing an Empire seems like a likely time for the market forces to demand the debt be paid off, but it was not the time obviously.]
6] So, to summarize ---
. . a] There does not seem to be a time for 325 years to *have to* pay the US debt off.
. . b] The only proper way is to use tax revenue dollars.
. . c] Using tax $$ is impossible politically.
. . d] Using tax $$ is economically impossible.
. . e] Converting one kind of IOU into the other kind of IOU seems pointless, plus it reduces the assets held by the American people.
Therefore, “what can *not* be done, will *not* be done” means in this case that, the US debt will never be paid off with tax $$, but maybe could be paid off with $$ from the magic money tree.
Therefore, you Millennials need to stop worrying about the crushing weight on you shoulders.
The weight or pressure you feel is quite real, but it is not the result of the national debt. It is *not* the result of the Soc. Sec. payments being made to retired Americans, they can be and are being borrowed. It is the result of political choices being made by Neo-liberal politicians being fed lies by Neo-liberal economists, who are in the pay of the super rich.
The super rich want you to hate Boomers because this divides their opposition.
In the current covidvirus crisis we all can see that the US Gov. can borrow massive amount of $$ in a failing economy and spend them to help the people but mostly to spend way over half of them to help the rich and super rich.
You Millennials need to vote and make the politicians do things that are good for you. Retired Americans vote and this is why there will be no cuts to Soc. Sec.. But, there is fiscal space to borrow much more and use it to help the mass of Americans.
You need to vote!
This time just vote to get more Dems in and Trump out. At local, state, and Federal levels.
In 2022 you can vote for progressive left of center Dems in the primaries and general election. I hope these Progressive Dems will use MMT thinking to increase deficit spending to help the mass of the American people, especially the young (we retired people don't need much more help).
You *need* to unite with as many voters as possible in the largest big tent possible if you want to get Progressive Dems to be a majority. This means you must stop shaming people for trivial sins and unite all possible voters for economic justice now. You can go back to the shaming after you win the economic war. [Do you think the shaming might also have been pushed by bots of the super rich to divide their opposition?]