The national debt is just another form of taxation, somewhat less progressive than other forms of taxation.
Think about it for a moment: the government “borrows” money in the form of T-bills – the overwhelming majority holder of which is – the federal government, in the form of the federal reserve. (Not that it matters who holds it, but that’s for another day.)
In short, it’s an intra-company transfer. Government borrows money from itself who then prints money. If the government was a private company, the auditors would pretty much just wipe it off the books.
Now, what happens when a government prints money? Inflation, of course.
So things costs more.
So people who depend on a flow of money (be it income or social security or some kind of stipend or entitlement, public or private) have less buying power with their stipend. An incremental portion of that buying power is used up by the government for it to buy things.
(This is also why the bond market has been relatively crappy.)
In other words, it’s a tax. You get less of what you earn, because the government takes some of it.
And it’s an interesting tax.
For example, the government can decrease the burden of entitlements on the budget by (variously) keeping/choosing/calculating the index of of those entitlements slightly lower than the actual rate of inflation. You shrink entitlement payments by no keeping up with the printing.
Same with employers, although they have a harder time sticking it to their employees, as they can quit. Much harder to quit being a citizen.
Also, interestingly, the tax, while it hits incomes (or any flow of money) the same, does not hit people who own stuff the same. If you own land, or oil, or even most stocks, the value of the stuff (assuming you bought reasonably) goes up with inflation (more or less) along with whatever growth you have going on in that item. So it spares the really, really rich (who own stuff) and hurts high income people who aren’t savers (in stuff, and not cash). And (depending on the honesty of the government index) can really screw people living on entitlements.
In fact, governments could (theoretically) simply have no taxation and simply print money, the rate of printing being you effective tax rate. (There are a lot of problems with this approach beyond the scope of an Internet post, but a number of governments have come close to this over time.)
The US government (and,actually, most governments) has gotten away with it: (1) because this is complicated as Hell so people don’t understand it and (2) technological and economic innovations have been so deflationary that most people don’t notice it too much.
So, for good or bad, the deficit is just a tax in another form. It’s relatively flat. And can be used to lessen the real burden of entitlements, without politicians paying the price (which, of course, they love).
So it can be reasonably conservative, to the extent any tax is conservative. Probably a fairer statement is it’s less progressive than the graduated income tax and about the same as a sales tax.
The scare stuff of “your selling your children’s future to China” is rather overblown (especially since the fed hold 3/4 of the debt). No, what they’re doing is making the debt (denominated in dollars) by the Chinese worth less. So the Chinese should be (and are) pissed. Heck we could just print more and give it to the ChiComs as payment. It’s not like it’s backed by gold or something. So even the interest is no problem. But, it makes a good scare story for the left and right.