The benefits are manifest. The interest bill facing government would be progressively lower as the national debt was repaid. The economy would grow faster because government would exit the financial markets, freeing up funds for private investment instead of absorbing private savings to pay for the fiscal deficit. Interest rates and mortgage rates would go down, putting more money in Americans' pockets and stimulating growth, and the added gross domestic product growth would make the promised Social Security benefits more affordable. Paying down the debt, in short, is the best kind of tax cut and the only sensible one.
Growth is the only way to pay for the graying of our population.
If we interrupt our present trajectory, the only way to meet our promises would be to increase taxes or reduce benefits. There is far too much happy talk about giveaways. Instead, we should concentrate on how to drive up the savings rate and the investments that have made our boom possible and with it, the increases in productivity that have contained inflation in a period of full employment. The numbers tell the story. We are borne along by an investment spending boom, especially on information technologies, which is about a half of all capital spending.