You have more important things to worry about than Government debt

Don’t let it ruin your fun.

The Government is taking on a metric shit ton of debt, and it’s worrying many people. Seriously, though. You have more important things to worry about than national debt as a proportion of GDP, don’t you?

It makes us nervous because taking on debt as a household is always a risky proposition. But that’s because our earnings are limited and our lives are short. If you had a massive income, you were going to live forever and your earning power continued to rise over time, would you worry about borrowing heavily to get through a rough patch and take care of your family? No, you wouldn’t, and the bank would certainly be happy to lend to you.

There are plenty of ways the Government can pay this debt back. The easiest is to simply pay it back slowly out of tax revenue generated by our recovering economy. That will take some time, depending on how fast we recover, but it would work just fine. There are a few experts who believe we may see inflation rising over the next few years; if we do see inflation go over 2%, debts become smaller in proportion to incomes and are more quickly paid off.

The risk of paying off the debt slowly is that we could be vulnerable to another crisis. If the Government decides it wants to reduce the debt faster, it has plenty of options. Probably the easiest would be to raise the age for superannuation – a change which also has the benefit of costing very little to implement (unlike means testing or a new estate tax, for instance). Our superannuation age was 60 between WWII and slowly increased during the 90s to age 65. Now it should be slowly increased to 70. Kiwis are living longer, healthier lives and far more of us are working in our 60s and 70s than ever before.

Anyway, don’t worry about it. You have much more important things to concern yourself with; things you can actually help to fix or change. Your own debt, maybe, or throwing a party with only 10 guests, or that squeaking noise in your car. New Zealand has a massive team of people paid to worry about the economy, national debt and Government spending. Your taxpayer money is funding their salaries so they can worry about it for you. You’ve effectively outsourced the job of worrying about our debt. Outstanding idea; now you can cross it off your list of worries and move onto the next thing.