James Hamilton needs to go back to school.
Debt is what you "owe", not what you plan to owe. That is like saying my current debt is
really $800,000 because after 23 more years of paying my mortgage payments, that
is what I will have spent. Nevermind that I can sell my house tomorrow and go live on a
park bench, thus wiping out my future liabilities.
Debt is what you owe on money you've already borrowed and spent. Debt (IS NOT) what
you will end up owing years and decades from now if nothing changes. And this professor
isn't taking into account future tax revenue changes. Even right now our deficit has fallen
by 50%, to around $600/billion.
The problem with that is financialization. Everyone is gaming the system in a spiral race to the bottom. You really do need to take future debt into consideration. The Post Office is an example. I'm not saying it is a functional system, but it is what it is until it is no more.