National debt: We should not start paying it off right now

I see he has decided to base most of his arguments off of the economic problem of reduced government spending in a depression. As such, I will refute his arguments in round 3, as well as offer some concluding statements on my arguments. Intro. The Debt Is Skyrocketing This isn't so much an actual argument as it is a prelude to my arguments. Anyway, it is clear that the US debt is skyrocketing, as shown here: [1]Even worse, the debt-to-GDP ratio has also been skyrocketing, and has just crossed 100% (meaning if the amount of American GDP in one year was taken to pay off the debt, we'd still be in debt): [2]It is clear that something needs to be done about the skyrocketing debt. The only question that remains is whether or not we should start paying it off now, or wait for more generous economic times. I will be arguing that the former is necessary. I. Interest on Debt Is Large As with any loan, country-to-country loans have interest involved, albeit they tend to be smaller than regular loans. In short, debt not only means that a country has to pay the amount it owes, but also the amount of interest that collects. Although not an issue for short-term, small amount loans, with the size of the US's debt and its stubbornness to not pay it back, interest on the debt is becoming a real problem and is taking a large chunk of your tax dollars. About 6% of the entire federal budget is devoted to paying interest payments. Here is an informative chart showing how much interest rates take of the federal budget: [3]But the story does not end there. Currently, because of the global economic downturn, interest rates are low. Whereas the normal interest rate on debt payments is around 5.7 percent, we are currently paying 2.5 percent interest. Whenever the global economy recovers, interest rates will more than double, resulting in $4 trillion in interest payments over just 10 years. [4]Even worse, with the federal budget projected to skyrocket over the next 30 years, interest payments will only get higher and higher. This graph shows historical interest payments, and projected interest payments over the next 20 years: [3]With an ever increasing budget, interest payments will get higher and higher, as this study concludes: A one percentage point increase in the projected deficit-to-GDP ratio would be expected to raise long-term interest rates by between 24 and 40 basis points; and A one percentage point increase in the debt-to-GDP ratio would be expected to raise future interest rates by about four or five basis points. [5][6][9] Overall, interest on debt will continue to rise as long as we do not make any serious attempts to pay it off. This will create the need for more taxation, and, as a result, eventual economic sluggishness. II. Economic Consequences of Debt One may wonder how debt can be bad for an economy. I mean, it provides a boost to the economy (I'll get to refuting that in the next round). However, even if that were true, there's still the underlying principle that debt is determinal to overall economic growth. A study conducted by Manmohan Kumar and Jaejoon Woo found that high-debt advanced economies grew an average 1.3 percentage points slower than low-debt countries (below 30 percent of GDP). Reinhart, Reinhart, and Rogoff discovered that the average growth rate in countries experiencing public debt overhang is 1.2 percentage points lower than in periods with debt below 90 percent of GDP. [7][8][9][10]How is this seemingly incorrect idea possible? As J. D. Foster explains, "The facts are that the U. S. government debt ratio has risen dramatically in recent years, is projected to remain highly elevated in the near term, and is then projected to grow rapidly beginning late in the decade. Simple reason suggests why this increase in debt would constrain policymakers’ choices in terms of allocating future resources, and theory suggests why it would be expected to increase interest rates substantially and why this increase in interest rates would likely put a severe damper on prospects for economic growth. The empirical evidence strongly supports these latter conjectures. "[9]To conclude this point, here is a chart showing projected US GDP with a public debt overhang, and without. A clearly noticeable difference can be seen: [10]II. A. Higher Inflation The primary way to reduce the inherent value of debt a country owes to to increase the supply of money in the economy, which means that more money is chasing the same nuber of goods, which leads to inflation. The resulting increase in the rate of price inflation would devalue the principal of the remaining public debt. The resulting inflation would also destabilize the private economy, increase uncertainty, increase real interest rates, and slow economic growth markedly. [10]II. B. The Crowding Out of Private Investment Because of the increased government spending, private investment is, more or less, "crowded out", resulting in reduced amounts of private saving, which decreases the amount of capital available for private investment, which, ultimately, slows economic growth and reduces productivity. These two things are definately bad for an economy, as standards of living increases slow and businesses are no longer able to grow because of the decreased productivity. The economy enters, basically, a period of stagnation. II. C. Conclusion on Economic Problems"In the end, all of [the] corrections and critiques show that countries with debt above 90 percent of GDP grow on average 2.0 percent less per year than low-debt countries and 1.0 percent less per year than countries with debt levels between 60 percent and 90 percent of GDP. "[9][11]III. Security Issues Due to space issues, I will keep this argument short, although it is self-explanatory. In a nutshell, here is the problem with debt from the foreign policy perspective: "If the debt continues to grow unbridled, the U. S. government will be constrained in its ability to pay for what it wants to do militarily and diplomatically. And it could limit the country's leverage with foreign powers. "[12]Admiral Michael Mullen has this to say about the issue: "A nation with our current levels of unsustainable debt . .. cannot hope to sustain for very long its superiority from a military perspective, or its influence in world affairs. " He conitues on to say, "The most significant threat to our national security is our debt. "[12][13]Basically, countries that we owe money to could make decisions for us without our willing on threat of a request for immediate payment, or, more seriously, the threat of withholding additional borrowing. It is easy to see how this would be a major security issue. Sources [1]: . http://teststripz.com...[2]: . http://nexvucapital.wordpress.com...[3]: . http://www.heritage.org...[4]: . http://blog.heritage.org...[5]: Thomas Laubach, “New Evidence on the Interest Rate Effects of Budget Deficits and Debt,” Federal Reserve Board Finance and Economics Discussion Series, 2003. [6]: Congressional Budget Office, “Updated Budget Projections: Fiscal Years 2013 to 2023. ”[7]: Manmohan Kumar and Jaejoon Woo, “Public Debt and Growth,” IMF Working Paper No. 10/174, July 2010, pp. 1–47. [8]: Reinhart, Reinhart, and Rogoff, “Public Debt Overhangs. ”[9]: . http://www.heritage.org...[10]: . http://www.heritage.org...[11]: Salim Furth, “Debt and Growth in a Time of Controversy,” Heritage Foundation Issue Brief No. 3926, May 1, 2013. [12]: . http://money.cnn.com...[13]: . http://www.cnn.com...