ISTM just looking at the federal debt as a single number is a bit misleading. Any treasury debut held by the Federal Reserve (in US terms, or similar central banks of other countries) is effectively interest-free, so it is certainly sustainable. The only downside there is the potential for inflation if it's done too much.
Debt help by citizens of the country is also somewhat neutral in terms of sustainability. The government needs to pay interest on it, but the money ultimately goes into the economy, so that might also be sustainable in larger amounts than might be intuitive.
Foreign-held debt is another matter, and I'm not enough of an expert to speak on the ramifications there. But I do think in general it's important to recognize that national governments which control their own monetary policy are a very different beast than a household or a business, and so their debt liabilities can't necessarily be thought of in the same way.
Foreign held debt is not much of a problem in principle, if the interest is lower than what the country earns from owning foreign assets.
But government debt is a problem even if the government doesn't go bankrupt:
You are right that a government that can print its own money can hardly go bankrupt financially. But it's perhaps not ideal for the government to consume ever increasing portions of what the nation produces? Forget about money and finance for a second: given the same material resources the private sector is usually more efficient at satisfying human wants.
> given the same material resources the private sector is usually more efficient at satisfying human wants.
I think this is a very dangerous simplification. There are certainly areas where private sector does a much better job than the public sector. But there are also areas where the public sector in general is superior. Examples are things like healthcare, infrastructure and education.
It’s not obvious that the public sector does a better job in healthcare, infrastructure or education. Rather we as a society feel that those things which should be available to all regardless of ones circumstances.
If you only educated those who could pay, they would be able to get educated more cheaply than our current system. However, this would eventually destroy the economic productivity of our country.
The private sector tends to do poorly in any area where the returns on an investment are not captureable by the investor individual but instead accrue to society as a whole.
The returns to education mostly accrue to the one get educated. So the private sector is perfectly capable of providing education. (And we see that in practice.)
If you believe 'The Case Against Education' the individual captures more than 100% of the net returns from education, ie there are negative externalities. That means society consumes more education than is optimal on utilitarian grounds.
That conclusion is counter-intuitive, but the argument is simple: education is mostly a signalling arms race.
> Caplan argues that the primary function of education is not to enhance students' skill but to certify their intelligence, conscientiousness, and conformity – attributes that are valued by employers. He ultimately estimates that approximately 80% of individuals' return to education is the result of signaling, with the remainder due to human capital accumulation.
There is certainly a LOT of signaling involved in education. As a college dropout and self taught developer this is intimately clear to me.
However, I have traveled enough of the world and lived enough places to see what happens when education systems are weak or non-existent. I think you underestimate the degree to which high levels of illiteracy and innumeracy absolutely destroy the potential for economic growth and prosperity.
It is possibly true that we (the USA) consume more education than is pragmaticly optimal. However, removing public education would result in a loss of economic output that far exceeds the savings. Predicting who will need that education sufficiently accurately is imposy for both society as a whole and for individuals contemplating their future.
Debt help by citizens of the country is also somewhat neutral in terms of sustainability. The government needs to pay interest on it, but the money ultimately goes into the economy, so that might also be sustainable in larger amounts than might be intuitive.
Foreign-held debt is another matter, and I'm not enough of an expert to speak on the ramifications there. But I do think in general it's important to recognize that national governments which control their own monetary policy are a very different beast than a household or a business, and so their debt liabilities can't necessarily be thought of in the same way.