America is not facing a debt crisis. Why pretend otherwise?

The maths of America’s financial problems are fairly simple. Every year the federal government spends more than it brings in so must borrow to fill the gap. This is fine when you’re young and healthy, with great prospects and you are borrowing to invest. But one day your lenders look at you and realise you’re not young and growing any more. You’re middle-aged and knackered. You are borrowing simply to spend and time is running out for you to pay back your debts. It’s an ugly moment for anyone, especially the most powerful country in the world.

There are economists like Paul Krugman who argue that America is not like a household or a person. It can borrow and invest in ways unique to sovereign powers. Countries do not simply age and die. They are capable of constant renewal through investment in education and infrastructure, funded by low-interest debt. So when bad times hit, you don’t cut, you borrow more to improve and expand.