Since this thread is wandering, I'll throw this in the mix

I recently learned about an internal report that was written toward the end of the Clinton administration which detailed the negative effects of actually paying off the national debt (which was projected to occur in 2012). It's called "Life After Debt" and the author was Jason Seligman.

LifeAfterDebt.pdf

The problem is basically that the entire world uses US Treasury Bonds (our debt) for so many functions that eliminating them all together would cause all sorts of problems. Seligman admits that the world financial market would adapt, but that the issues introduced by eliminating the US national debt completely are pretty significant.

Food for thought..