After briefly surging to the forefront of the national debate, concerns about U.S. debt appear to have gradually dissipated in the body politic. A recent Pew survey found just slightly above half of Americans consider the budget deficit a top priority, down from 72% in 2013, and the issue has fallen in that time from the public’s number two priority (behind only the economy) to number nine.
But while deficit hawks may no longer hold as much sway, their concerns are still worth investigating, especially as election season approaches. The essential question: How much does national debt matter? For a country like the U.S. with a good payment history, (relatively) strong economy and control over its own currency, the answer at least for the moment, is “not too much.”
To understand why, looking at the country’s total debt, which has nearly doubled following the financial crisis, matters less than how much it costs to finance our debt. That is, the most important number is the minimum payment on the credit card bill, rather the the total amount we owe.
