Harris's proposals, it can be argued, are in the nature of investment. They will be paid initially by money creation, just as we "pay" all deficit spending. The intention will be that ultimately her initiatives will be repaid via GDP growth.
Let's remember that what we call public debt is not really debt. It is nothing at all like private sector debt, i.e., credit, though seen through the eyes of the buyer of such ersatz debt it can not be distinguished from real debt. Only when looked at from the government's perspective is it obviously not debt but instead an interest paying store of money.
No nation that creates it's own money and has no outstanding true debt instruments denominated in another nations currency has any real debt. The money the Fed refers to as M2 or "the money supply" is almost all temporary "bank money", i.e. credit, created from fractional reserve banking. What we call "the national debt" is mostly present as Treasury Securities, and these, despite their liquidity, are on the shelf as an interest paying store of money that is not a part of the M2 money supply.
It's helpful to recognize that all our money has its origin in government deficit spending. Without deficits there would be no money at all in the private sector!!! All of the transactional money we use and all of our private sector savings has its origin in deficits!!! And, of course, as the economy grows, the aggregate deficit must grow accordingly to prevent deflation. It's nonsense to speak of paying off the national debt.
An important consequence of the origin of our money is that we can afford any government investment, the only constraint being the rate of investment. Except in emergencies, new money should not be spent into the economy faster than existing resources can absorb it. Any excess over that will be absorbed by conversion to Treasury Securities to prevent it from being absorbed via inflation.
I am an advocate of bracketing tax on unearned income, as well as returning to many more upper income tax brackets with a high upper marginal rate, perhaps as high as 70% or even higher. This would lower deficits without harming the economy as those who would be paying such high rates have low propensity to spend most of their income. There is already more than an adequate supply of money to support private sector investment in the form of Treasury Securities owned by the private sector. We don't need to tax in order to spend. Rather we need to tax at high, upper marginal rates to protect our democracy, to fend off what could ultimately become a deficit Treasury-Security servicing spiral and to protect our money's value.
