For nations, as for individuals, there are plenty of compelling reasons to borrow against future income to finance large undertakings. Just as individuals borrow to buy houses, automobiles, and college educations, nations borrow to finance capital infrastructure, to fight necessary wars, and to counter the human consequences of bad economic times. But for nations, as for individuals, when times are good it is critical to use any and all excess cash to pay down those loan balances and credit card bills.
It will reduce federal spending. Interest payments on the national debt in are about 15 percent of the federal budget. Using surpluses to cut down the debt increases future surpluses significantly which also can be used to pay more of the debt. This action will lower the amount of interest we pay on the debt.
It will encourage economic growth. Paying down the national debt will reduce demand for capital and lowering interest rates which will reduce the cost of future borrowing for both private and public investments. Capital investment by businesses should increase significantly, along with an increase in new jobs. With mortgage interest dropping, homeownership should become accessible to a whole new segment of moderate-income Americans, enabling them to accumulate real wealth and economic security. The economy as a whole would become less dependent on foreign capital investment to finance past borrowing. Government borrowing at every level would become less expensive as well, including expenditures on roads, prisons, schools, and other capital facilities.
It will help stave off the insolvency of the Social Security and Medicare systems. Federal operating budget deficits are being financed with Social Security trust fund surpluses. Reducing debt with general revenue surpluses in the future will allow full use of the trust fund for benefit payments. since Social Security funds make up a part of the surplus that is to be used to pay down debt. On the down side, unless Social Security's benefit structure is reformed, the system will still face obligations exceeding its revenues. General revenues will be spent to make up shortfalls and the system will absorb an ever higher percentage of national wealth.