>how are we realistically going to pay down the national debt
We don't want to pay down the national debt. Each treasury note is a promise to provide the holder with real goods and services later, and we need to make those promises to our aging citizenry. We do this in part with the intra-governmental debt that the Social Security Trust Fund holds. Regular citizens also save for retirement, and they hold and demand Treasury bonds as well.
Yes, we should pay down the national debt. Why would we want to pay interest on outstanding debt when we could lower taxes or increase services instead?
You don't have to buy Treasuries to save for retirement. There are all sorts of bonds, foreign and domestic.
If people need to save, someone has to borrow. So where should all that money saved in USD go? The high risk stock market? The reason the US dollar is so powerful in the world is that there is always a safe place to park a large amount of them (the US gov) when you need to use them later. Take that away, and the dollar becomes much less appealing internationally. Treasury rates (what you call interest) are actually negative ATM when inflation is considered (we make money by borrowing it).
We should be spending more wisely, but debt economics is not as simple as it seems.
The government is buying treasuries to push down rates, not because they are doing QE at the moment. Now pushing down rates means there is more money to borrow (the gov buys from owners of bonds, they get cash in return), but it doesn't necessarily mean the government is printing money (you can tell by he inflation rate, which is still quite reasonable).
The corporate bond market cannot soak up trillions of dollars in safe investments. In fact, low interest rates can simply result from high demand for treasury bonds because they are a "sure thing."
>The government is buying treasuries to push down rates, not because they are doing QE at the moment. Now pushing down rates means there is more money to borrow (the gov buys from owners of bonds, they get cash in return), but it doesn't necessarily mean the government is printing money (you can tell by he inflation rate, which is still quite reasonable).
We've had quite a bit of asset inflation. Sure, the consumer products you buy that were made in China aren't going up, but Zillow says my house is worth more than double what I paid five years ago. You can't tell someone looking for housing there's no inflation.
Did you ever stop and wonder why infrastructure costs so damn much in the US? Why a rail segment going from nowhere to nowhere in California costs seventy billion dollars, or a new bridge ten billion?
>The corporate bond market cannot soak up trillions of dollars in safe investments. In fact, low interest rates can simply result from high demand for treasury bonds because they are a "sure thing."
Low interest rates are the result of artificial demand for bonds. If the government would stop monkeying with the bond markets they could "soak up" enough to cover domestic savings. Foreign governments would have to find somewhere else to park their money, but that's not the end of the world.
Environmental regulation, high labor costs; I.e., we aren't a shithole like china.
Housing bubbles come and go, they don't impact real inflation.
Unfortunately, libertarians would throw away all of our influence in global finance for an isolationalist paradise, but it won't work. If Russia and China aren't economically dependent on us, do you think that would actually mean less military tension?
Wait, you want to raise taxes or reduce services now so that we can pay down the debt so that we can lower taxes or increase services later? At near-zero interest rates?
We don't want to pay down the national debt. Each treasury note is a promise to provide the holder with real goods and services later, and we need to make those promises to our aging citizenry. We do this in part with the intra-governmental debt that the Social Security Trust Fund holds. Regular citizens also save for retirement, and they hold and demand Treasury bonds as well.