Bridges and roads to nowhere do not help the economy. If the government has enough money to build such things, it has that money to return to the taxpayers where it will spur economic worthwhile and sustainable growth. If government does not have the money and borrows it instead, government has only increased debt and the burden debt has on the taxpayers.
Since when does China pay us to borrow its money?
Woody
The government issues what are called inflation protected securities, which are indexed to the CPI--the inflation measure. The good thing about these is that it allows the government to capture extremely low borrowing costs during a time of high demand for it's bonds and low inflation. (Low inflation drives more demand for bonds and vice versa.) Its also a nice check on government borrowing, as it makes them less appealing and costly when inflation and interest rates are rising. This is a natural check on government borrowing better than any congressman. For most of the last 7 years the government could borrow at rates of zero, close to zero, or less than zero out to 10 years. Here's the 5 year chart, so you can see the stark difference. (Have to post the 10 year in a seperate post because of the way pics post here.)
This is literally a free lunch to US taxpayers. If they issued these bonds and then invested in projects which raised the growth rate of the economy in the long run or raised living standards then that's not a bad thing. China and many other countries buy these bonds on a regular basis. Hell, they could issue tons of these and give everyone a tax cut. The deficit would rise of course, but it would be costing us essentially nothing. It's not the size of the debt that matters. It's how much it actually costs to carry and service it. I think you're comparing your monthly payments on your debt to the actual amount outstanding. The amount still owing on your mortgage represents the total debt, whereas your monthly mortgage payment represents how much it costs for you to service that debt and pay it down. In the case above that represents an actual ongoing cost of zero, or less than zero, dollars to the US taxpayer.
Does that make sense? It's like having a principal only mortgage. The money is literally free.