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

I will begin by refuting my opponent's notion of stimulus spending in a recession - basically the bulwork of Keynesian Economics, as my opponent's arguments have concluded. I will conclude with defending my original arguments. R. Stimulus Spending Is Bad for an Economy To begin with, I will show how stimulus spending does not accomplish the goals it's set out to. I'm talking specifically about the American Recovery and Reinvestment Act (ARRA) of 2009. ". .. The administration’s promise that the [ARRA] would keep unemployment rates from reaching 8.8 percent and would create some 3 million jobs - 90 percent of them in the private sector - did not materialize. " Further, "From 2008 to 2009, the ratio of the deficit to Gross Domestic Product (GDP) rose from 3.2 percent to 9.9 percent. This 6.7 percent massive dose of fiscal stimulus represented the largest deficit burst since 1942. .. . If demand-side stimulus worked, the economy’s growth today should be China-esque. " But, it hasn't. It has been the slowest recovery in modern (post-WWII) history. "[1][2]Here is a graph showing how the ARRA failed in its objective: [1]There's also a lot of evidence that stimulus spending actually hurts an economy. As Frank Shostak explains: "The government as such doesn't create any real wealth, so how can an increase in government outlays revive the economy? Various individuals who will be employed by the government will expect compensation for their work. The only way it can pay these individuals is by taxing others who are still generating real wealth. By doing this, the government weakens the wealth-generating process and undermines prospects for economic recovery. "[3]To present more evidence of this situation: "First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. "[4] This analysis comes from data collected over 200 years in 44 countries covering a wide range of circumstances. Overall, the notion that paying off the national debt during a recession will harm the economy because it takes away from potential government stimulus is false, because government stimulus is harmful to the economy. If anything, paying off the debt boosts the economy two-fold. As this graph shows, government stimulus is bad: [5]DC1. The "Crowding Out" Effect My opponent isn't using corrected data. The only reason that interest rates are low in America now is because of the Fed's massive quantitive easing plans. According to Reinhart, Reinhart, and Rogoff, in 11 of the 26 cases where public debt was above 90 percent of GDP, real interest rates were either lower, or about the same, as during years of lower debt ratios. To think of it another way, 15 of the 26 cases had circumstances where the interest rates rose, which is more than half. Regardless, however, Soaring debt matters for economic growth even when market actors are willing to absorb it at low interest. [6][7]As for inflation, my opponent uses faulty data. Using the Everyday Price Index (EPI - a measure of the value of everyday goods), a rate of 8.1% is determined. In addition, if one uses ShadowStats, one gets an inflation rate of of around 9%. Even so, this can also be blamed on the Fed's quantitive easing. [8][9]This graph shows the ShadowStats statistics: [9]DC2. Economic Growth ". .. we can print as much money as we like" I will restrain my laughter at this comment and go straight for the refutation - you're devaluing the currency, making people's savings have less value, which will force them to buy fewer things, which will decrease overall output. Also, it would be very hard the next time the US would want to borrow money from another country as the country would be being paid in worthless currency. It would solve the debt problem, but you'd have economic chaos afterwards. DC3. Implications of Debt The Government is not a business - therefore, how a business functions is not how the Government should function. Claiming that they should is fallacious (also applicable to the above point). Further, I already provided empirical evidence that recessionary fiscal policy (under the Keynesian system) only harms an economy. The ARRA certainly didn't work. DC4. Interest Rates I'm probably beginning to sound like a broken record now - but then again, so is my opponent. However, I'll now post two informative graphs about what the stimulus did:To unemployment: [10]GDP: [11]Now tell me again how the stimulus helped the economy. DC5. Interest on Debt I mentioned this in DC2, but printing money to pay off debt is never good for an economy - it's worse than using regular Keynesian economics, and waiting until the economy is back on track. Printing money does two things - makes savings weaker, and discourages any additional loans from other countries. Inflation goes up with pumping money into the economy, too. DC6. JapanBut their economy isn't rosy. "Contrary to Bernanke and other commentators, the lost decade in Japan occurred on account of the loose monetary stance of the BOJ [Bank of Japan]. The economy fell into a slump on account of a severe destruction of the machinery of wealth generation. Instead of allowing a quick cleansing of the system, the BOJ enforced massive pumping. This has prevented the elimination of the non-productive bubble activities and prolonged the economic agony. "[12] Japan has not yet recovered from its lost decade because of the advice of Keynesians like Krugman. They are projected to go into another lost decade if their fiscal policy and economic plan does not change. That's a strike against high debt-to-GDP ratios. DC7. Nominal Debt Most of my opponent's argument I have already refuted above, but one part is worth mentioning - the Great Depression. He curiously attributes the Great Depression to a lack of expansionary fiscal policy. The problem with this is that even the Keynesian model accepts that that wasn't the cause of the Great Depression; only that it made it worse. Even so, it's worth mentioning that both Hoover and Roosevelt pumped massive amounts of stimulus into the economy. "Our results suggest that New Deal policies are an important contributing factor to the persistence of the Great Depression. .. Thus, the model accounts for about half of the continuation of the Great Depression between 1934 and 1939. "[13]DC8. Dropped Arguments My opponent never really attempts to refute how interest is bad, and never even touches the security issues of national debt. For the former, keep in mind that you never get interest back, regardless of whether the stimulus works. That's an unnecessary opportunity cost, Conclusion Basically, my opponent attempts to use Keynesian economics to prove his case, even though I have shown it to be a failure. The debt needs to be paid off now for the American economy to get back on track. Sources [1]: . http://reason.org...[2]: . http://www.heritage.org...[3]: . http://mises.org...[4]: . http://mises.org...[5]: . http://spectator.org...[6]: . http://www.heritage.org...[7]: The Reinhart study cited in the last round. [8]: . http://www.nypost.com...[9]: . http://www.shadowstats.com...[10]: . http://www.anchorrising.com...[11]: . http://seekingalpha.com...[12]: . http://mises.org...[13]: Cole, Harold L. , and Lee E. Ohanian. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis. "