Brad, A question.

I understand why you argue that federal borrowing is not a burden. However, does it matter who receives and who has to make debt service payments in future years? Is there analysis of this?

For example, at first glance it seems that those households who directly or indirectly hold the most US Treasury debt will receive most of the debt service payments. Consider foreign households who directly and indirectly own large amounts of US debt. China and Japan alone hold more than 10% of US debt and pay no US federal taxes to service that debt. If these conditions continue into the future and federal debt levels continue to rise, wealth transfers from US households to Chinese and Japanese households will increase.

A further consideration. Some argue that deficits in recent years are to a considerable degree the result of tax policies that contribute to rising US income and wealth inequality. Some also argue that wealthy households directly and indirectly own more Treasury securities than ordinary households. If true, is it possible that future-generation ordinary households will be making debt service payments to future-generation wealthy US households and foreign debt holders that exceed the benefits that those future ordinary US households receive from greater current US government borrowing?

If there's research on these generational and demographic debt-service wealth transfer questions, please let me know at rhdugger@hanprov.com. Thanks.