Timing and context are everything.
Since 1981 in the U.S., the constant refrain which has blocked almost all efforts to increase domestic public spending -- including those that would not increase the deficit -- is that eliminating the deficit should be first priority. This is being couched in terms that preclude deficit finance during recessions or for the purpose of financing public investment of any type.
This has carried over into the premise that we must now eliminate the national debt. Raising taxes to finance new spending is hampered by the reality that Federal taxes as a share of GDP in the U.S. are at the top of their historic range (about 21%).
The idea that you can spend more by paying down debt because interest costs decrease is simply a non-sequitur. You can spend more later at the price of spending less sooner, or vice versa. Military spending in the U.S. has trended down since 1986. Under Clinton's budget, this would continue; military spending declines in real terms (inflation-adjusted) in Clinton's budget. So reducing debt less now means spending more now on domestic purposes. Finally, the "less, later" should be qualified -- in a growing economy, the non-interest component of 'less, later' could easily outstrip that in the initial, 'borrowing' period. As long as there is slack in the economy, spending more now has the potential to expand employment. As long as we think the private sphere of consumption is too big and the public too small, there is benefit to shrinking the former for the sake of the latter.
A moderate policy of surplus generation -- implying some debt paydown, conditional on high employment is reasonable.
In a different context, where the public sector is as big as we expect it can or should get, if not larger, one could imagine a better case for more urgent debt paydown. Also, if deficits and debt are much too high. This is not true for the U.S., in my view.
>From the standpoint of political strategy, debt paydown
says there is no purpose in considering an expansion
of the public sector, nor in altering the after-tax
distribution of income (through the use of tax cuts).
I'd say such a policy has a high hurdle to pass
muster as any kind of progressive campaign.
MBS