Do you pay only the minimum balance on your debt?

Discussion in 'Economy' started by Wry Catcher, Jan 6, 2013.

  1. Wry Catcher
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    Wry Catcher Platinum Member

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    I listened to Sen. McConnell a few moments ago and came away perplexed. The Senator stated the tax issue is settled and we need to cut spending. Nowhere in his comments does he explain how the massive federal debt can be brought down by cutting spending.

    If we only pay the 'minimum due' on the debt, and interest on the debt is added daily, how can we ever bring the debt under control? We cannot save enough unless we create massive unemployment and defer maintaining our infrastructure, putting our health, food, air and water at risk.

    Of course I'm aware that some believe spending must be controlled by a balanced budget amendment, and that money not planned for in such a budget cannot be spent. I believe such a plan is ridiculous and not doable for the cost for natural disasters, plagues and defending the nation from invasion or insurrection cannot be planned.
     
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  2. Intense
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    Intense Senior Member

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    We do need to cut spending, We do need to plan for Emergency. These interests do not conflict, when reason is applied.
     
  3. Wry Catcher
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    Wry Catcher Platinum Member

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    I agree. What reason is McConnell applying when he claims we solved the revenue problem and need to stop spending? How does such reduce the debt which he claims is the greatest problem we face today? It might resolve deficit spending but does nothing to retire a debt growing by interest paid.
     
  4. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    go hang out in bankruptcy courts. People are there because they spend too much. Thier income or revenue is a given but what they spend can vary by 1000's of percent. If you cant control that you cant fix the problem.

    Democrats are irresponsible slime who spend like drunken irresponsible bankrupt sailors. In fact, the are worse because they want to steal the money they need rather than deal with their addiction.
     
  5. Wry Catcher
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    Wry Catcher Platinum Member

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    You completley missed the point. I suppose that was intentional so you might go off on your partisan rant.

    Here's the Point: McConnell claims the nations debt is a great threat to our nation; he claims we have solved the revenue problem and now claims we need to solve the spending problem.

    We do need to reduce spending, but what will be the likely consequences? we may reduce the annual deficit, but the national debt will continue to grow. Why? We pay interest on the debt. We can not save enough to pay for essential services and apply such saving to substantially reduce the debt. Why? Because the way for government to cut spending is to increase the number of persons employed, for the highest cost to government is salary and benefits.

    If we put more people on the unemployment roles, less money will circulate throughout the economy; more homes will be foreclosed, more small business will fail.


    We also have an employment problem,
     
  6. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    no idea on earth what your point is!! When you are bankrupt you cut the spending that made you bankrupt. Income or revenue is relatively fixed. GOt it now????????/
     
  7. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    The only way to reduce the debt is real economic growth.

    Spending needs to be cut to the point where we are not taking on more debt and the fear of more tax increases is quelled. At that point, economic growth should start to revive. Once tax receipts grow via economic growth, that growth should be used to retire the debt.

    As to our original question: We pay off my credit cards in full each month (they are for convenience) - and pay extra towards the principal on our mortgage. If we have a major consumer purchase (i.e. automobile), we save and pay for it in full. It's great to have a very low debt to asset ratio.
     
  8. Wry Catcher
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    Wry Catcher Platinum Member

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    Are you suggesting the Federal Government default on the debt?
     
  9. Wry Catcher
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    Wry Catcher Platinum Member

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    Your second paragraph is exactly what we do, it is not what the Congress has done nor is it something a nation can do. My wife and I have insurance and receive more than we spend. Government is self insured and must use its resources when natural disasters occur.

    Spending cannot be cut to the point you suggest unless doing so has a cost benefit. IMO massive layoffs and not funding major projects - i.e. the highway bill - create a cost deficit. If the debt is the greatest problem facing our country I propose a 10% surtax on every income tax due on April 15th. No exceptions and every dime collected by the surtax be used to retire a portion of the national debt.
     
  10. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Spending can be cut. There is so much waste and crap in government spending that the proper course of action is to descope to basic functions. Yes, a lot of worthless government employees will lose jobs - and there will be less corporate welfare. Both of these would be very good things, imo.

    A 10% surtax on income is just pouring gasoline on a fire. Our corrupt political class will spend it.
     

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