The US national debt sits at $33 trillion — but here's why the country won't pay it down

We’ve all been told to spend less than you make, avoid high-interest credit card debt and delay material gratification on big-ticket items until you’ve worked out the numbers first.

All of that’s true and smart. Excessive personal debt will force you to spend a lifetime playing catch-up, or to declare bankruptcy, which leaves a black mark on your credit score for between seven and 10 years.

But debt-wise, comparing the federal government to a family of four doesn’t work. That’s because the principles of personal finance don’t apply to how governments spend. So unless you or someone you know plans to dress as Uncle Sam in the next local Fourth of July parade, dismiss the notion that governments are people. They play by entirely different pocketbook rules, which Krugman makes clear as crystal.

Debt grows, but revenues do, too

Need a pat explanation for why the government need not pay off its debt, even though you must? Here it is, in blunt Krugman style: “You are going to get old and eventually die. The government isn’t.”

In other words, the capacity of the United States or any sovereign nation to manage its debt boils down to one question: can it still produce revenue to meet its obligations? That’s where his notion of “servicing” debt as opposed to paying it off in full comes into play.

To be sure, Krugman notes by way of Rudyard Kipling in his poem “Recessional,” that all nations will be “one with Nineveh and Tyre” and cease to exist. But excluding such a tragic event — in which case debt would be irrelevant anyway — governments “normally see their revenues rise, generation after generation, as the economies they regulate and tax grow,” Krugman wrote.