i have to say that it is roughly impossible to know whether the national debt is something real and whether it is a serious problem. or at least, i have a hard time trying to tell. you still have left people starting with krugman calling for more - perhaps much much more - government spending, right now. and it's the right time to borrow, because interest rates are low. so let me ask you this: is there a level of debt that is really unsustainable? or is the debt a kind of abstract thing; gov debt is not much like household debt, and so on. because if there is a level of debt that has worse effects on the economy than 'austerity' i would like to know where it is. so say that the debt was 30 trillion. what effects would that actually have? or is it all kind of just moving markers around with no real concrete effects on anything?
i think in some ways it comes down to different ontologies of money or accounts of what it is, in particular at this stage of its development. so: it's this stuff that the government creates from nothing, more or less, but it embodies or represents wealth. or it is wealth. so, money i think for krugman types is in a way a simulacrum without original; it's a baudrillardian or pomo theory of money. in a way, the economy of a country takes place to a large extent on an imaginary level. there is no reason that money should be tied to anything concrete, or there need be no close relation between what the economy produces concretely and the wealth in the form of money it generates. the federal reserve can invent wealth and put it into the economy. then people will be able to borrow money, hire people, etc. it doesn't mater what, if anything, is produced on the other side, or at least the relation between the money and what is produced on the other side isn't direct: they don't vary together. it's the post-modern idea: the representation creates the reality.
on the other side you have people who take a mimetic view of money: it has to represent, be engaged directly with, concrete sources of value and exchange like commodities or materials or labor. you can't in the long term have a money supply that is wildly disproportionate to the concrete economy. the gold standard people want to impose a mimetic money, to reconcretize money or display it in its character as a representation of an underlying reality.
now one thing to say to any leftists who have any sympathy with marx: he always brought everything back to the actual material conditions of production: that was economic reality, and the fictions conjured around it were things to be seen through.
i personally intuit a mimetic view; i think this idea of spending yourself out of a recession becomes absurd after a certain point, and we have certainly dug ourselves quite the hole. the further disconnected fiscal policy or the money supply becomes from the actual production of the economy, the more you court an extraordinary collapse in which the fiction is horribly revealed. however, i am sincere in saying that i can't necessarily defend this intuition, certainly probably not against an expert.
meanwhile, i want you to think about the fact that all economists who in general favor a robust state role take up one position on this, and all who in general favor a small government role favor the other. i suggest that liberal economists think it's empirically true that deficit spending is nbasically not a problem and is the right apporach to a recession because they think the state should be bigger, and conservative economists think that government debt is disastrous because they think the state should be smaller. now there is no justificatory connection from the normative positions on the size of the state to the empirical claims about the effects of deficits. so either this is a massive coincidence, or really the empirical evidence is not doing any of the work. (the implication works the other way: if deficit spending really doesn't have bad effects etc then money is such-and-such. that is not the direction in which these folks are making the inference.)
what you and i and krugman should start by asking ourselves on something like this if we're going to have any intellectual integrity is: what do i want to believe; what, with regard to this particular matter, would it serve my purposes to believe? then insofar as this material is extraneous to anything that could be regarded as actual evidence, i've got to try to compensate for that in generating an opinion.