Because the rate of production never stays in line with the rate of spending; you can't force it to stay inline. If you debase a currency, consumers will typically seek to spend it before it loses more purchasing power, which automatically unbalances your economy because you can't control exports or production in a way that you can match the consumption. We saw this disastrous effect during the 2000s, when the dollar lost a large amount of value due to budget deficits, and the middle class lost a lot of ground as wages failed to outpace the currency devaluation.
Why should you care about the US national debt? Because at just ~3.5% interest on that debt, it'll eat up a share of the Federal budget larger than either Social Security or Medicare/Medicaid, at a time in which the US already can't afford its entitlements. Each year that goes by, the US can only afford to pay a lower and lower interest rate on its national debt, and it has to 'print' to cover the deficits today - tomorrow when the red ink on entitlements is greater and the interest costs are greater, the deficit will be greater (projected to explode higher in the near future). That will lead to further devaluation of the dollar, which will further wreck the middle class as it did last decade with the weakened dollar. Exports didn't come even remotely close to making up for the weaker dollar hit last decade, and they won't next time either. The US runs a massive trade deficits, it takes a far worse hit on a weaker currency than it benefits from such.
The only large buyer left for US debt, is the Federal Reserve. The US Government is insolvent without monetizing its own debt via the central bank. Once a nation hits that point, it never recovers.
Hmm. I wouldn't characterize what happened in the 2000s as a debasement of the dollar. Real wages have decreased, but shouldn't we want to spend less money on labor as we develop labor-saving technologies and take advantage of cheap foreign labor that substitutes for domestic labor?
Why is a trade deficit a bad thing? It means we're sending dollars overseas and other countries are sending us real stuff in return. Sounds like a pretty good deal to me.
What's wrong with the fed being the only large buyer for U.S. debt? If the fed holds all our treasury securities, then the interest payments don't really matter, right?
Is there any reason why it's bad for this to be a permanent arrangement?
I still don't see why an ever-growing deficit is a problem. Do you think it will necessarily lead to inflation? If so, why?
When you say that the U.S. can't afford its entitlements, what do you mean by that?
Why should you care about the US national debt? Because at just ~3.5% interest on that debt, it'll eat up a share of the Federal budget larger than either Social Security or Medicare/Medicaid, at a time in which the US already can't afford its entitlements. Each year that goes by, the US can only afford to pay a lower and lower interest rate on its national debt, and it has to 'print' to cover the deficits today - tomorrow when the red ink on entitlements is greater and the interest costs are greater, the deficit will be greater (projected to explode higher in the near future). That will lead to further devaluation of the dollar, which will further wreck the middle class as it did last decade with the weakened dollar. Exports didn't come even remotely close to making up for the weaker dollar hit last decade, and they won't next time either. The US runs a massive trade deficits, it takes a far worse hit on a weaker currency than it benefits from such.
The only large buyer left for US debt, is the Federal Reserve. The US Government is insolvent without monetizing its own debt via the central bank. Once a nation hits that point, it never recovers.