Morgan Housel, describing how we’ll hopefully “pay” for the truly massive bailouts we’ll need to get through the Covid-19 pandemic:
I’ve heard many people ask recently, “How are we going to pay for that?”
With debt, of course. Enormous, hard-to-fathom, piles of debt.
But the question is really asking, “How will we get out from underneath that debt?”
How do we pay it off?
Three things are important here:
1. We won’t ever pay it off.
2. That’s fine.
3. We’re lucky to have a fascinating history of how this works.
The analogy here is with World War II. It’s a great read.
I think Housel is right that high bracket tax increases will be inevitable. They’re almost comically low now compared with other countries as well as our own history, and this country was far more functional when they were higher. There are plenty of important reasons to do so even before tacking on several trillion dollars in additional debt and now presumably precipitously less political tailwind to preserving the top 0.1% than there has been in decades.