Ignore The Endless Talk Of Doom, Budget Deficits Really Don’t Matter

Originally Published in Forbes on 9/24/17.

U.S. federal debt added up to $908 billion in 1980, but today, nearly 40 years later, the number comes in around $20 trillion. That the amount owed by U.S. taxpayers has soared over twenty-fold would, in a static world, correlate with a huge increase in borrowing costs for the U.S. Treasury.

Except borrowing costs haven’t risen. While the yield on 10-Year U.S. Treasuries was 10.8 percent in 1980, as of today the yield has declined to 2.27%. Yes, you read that right, amid soaring federal debt the cost of government borrowing has plummeted.

[…]

Which brings us to Kevin Williamson’s recent commentary at National Review about Republican efforts to cut taxes. […] Taxes on income and corporations are still way too burdensome (the corporate tax is a double tax on individual earnings, and should be zero), but the simple fact that the five most valuable companies in the world are all U.S. based is a certain reminder that the 35% U.S. corporate tax rate is not the actual penalty levied on American companies.