Mulvaney has said...that one of the greatest dangers we face as Americans is the annual budget deficit and the $20 trillion national debt. This notion is an effective political weapon, but it's dangerously untrue. If it were true, the country would have failed long ago.Pechter is right that the budget deficit can all too often be an effective political weapon. Sometimes budget rationale only comes into the picture, as means to arbitrarily limit economic activity. He continues:
Debunking this canard should be a priority for anybody who cares about retirement security. As long as we believe in the debt bogeyman, we can't productively solve the Social Security and Medicaid funding problems, or defend the tax expenditure for retirement savings, or even create a non-deflationary annual federal budget. Everything will look unaffordable.Unfortunately, some things have become unaffordable (beyond a certain general equilibrium limit), given the way they are currently structured, and the position they may hold as an aggregate medium of account function. The relationship of aggregate debt over time (in relation to output and growth trajectories), is important, However, I definitely agree with Pechter's conviction, that it is important to preserve valuable economic complexity. Not everyone who expresses concern about debt or budget obligations, does so with a corresponding intent to preserve valuable knowledge use or skill, in the marketplace. Budget obligations should not be a convenient fall back position, for political coalitions which would undermine economic potential - mostly with intent to protect the supply side limits of special interests.
That said, debt cannot cannot continue to grow indefinitely, in relation to output which is clearly measured and ascertained as it is created. Oddly enough, the more that a society is willing to internally account for the measure of wealth when it is generated (via primary market means), the more debt that populations and policy makers are likely to remain comfortable with, as well.
Once, it was quite logical to fund knowledge via open ended (and secondary market) means, when the use of knowledge remained (somewhat) minimal in relation to manufacture and agriculture. Indeed: so long as primary markets maintain a healthy balance with secondary markets, it remains safe to fund for knowledge, via the open ended means of debt and further budget obligations.
Today, however, everything has changed in this regard. Secondary markets are presently too dominant in relation to primary markets, which in turn negatively impacts the nature of budget obligations. And as knowledge and information has became ubiquitous in the marketplace, knowledge is fast becoming underutilized (insufficient practical dispersal), because too little of it is being generated via reciprocal and direct means. The present lack of economic reciprocity patterns for knowledge use, means many who prepare for knowledge based work are deemed "excess" labor capacity.
We need more means to solve for economic reciprocity at the outset. Any time value or product which has to be politically approved in order to occur, will always be subject to political forces that use budgets to bludgeon such endeavour out of existence. By closing the circle of reciprocity in terms of knowledge use formation, it becomes possible to preserve economic complexity at multiple levels of society. Solving for economic reciprocity at the outset, means less debt over time is needed. And the more economic complexity that can be generated as primary market activity, the less anyone needs to worry, about the debts and demanding budgets, that remain.