How would paying down the debt effect the economy?

Discussion in 'Economy' started by Article 15, Feb 3, 2011.

  1. Article 15
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    Article 15 Dr. House slayer

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    In the last 60 years only three times has our national debt been less than it was the year before. Every time this happened it was in the 1950's and in each instance the debt decreased by less than 1%. To find the last time the debt was being paid down at any kind of significant manner you have to go back to the 1920's. It's been a while and things have changed a lot since then.

    http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

    So ...

    What do y'all believe would happen to the economy if by some miracle we got into the black and were able to start chipping away at the debt?
     
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  2. rdean
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    rdean rddean

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    If the economy is growing and we are bringing in more than we spend, then the point is moot.

    From 2001 to 2008, the US sent millions of jobs to China with the support and help of the US government. Look how well the Chinese economy grew. That proves it works.
     
  3. Neubarth
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    Neubarth At the Ballpark July 30th

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    Technically paying down the borrowed debt would be foolish, as all money borrowed from the FED is free and we never have to pay it back. A lot of really stupid people do not understand that, but it is the current reality. The FED takes our interest payments and sends them to the Treasury.

    No Interest = Free borrowing.
     
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  4. Article 15
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    Article 15 Dr. House slayer

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    What about the foreign debt?
     
  5. Article 15
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    Article 15 Dr. House slayer

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  6. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    That's right. The Fed is a privately owned company. If they lost money on their "investments" well, too fuckin' bad for them.

    Then maybe Congress would get back to it's Constitutionally mandated job of managing the money supply.
     
  7. Two Thumbs
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    Two Thumbs Platinum Member

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    A lower debt = stronger dollar.

    Basically we will be able to buy more with the same amount of money.
    Once we can buy more, (increasing taxes collected) demand for products goes up.
    When demand goes up, biz has to hire more people (increasing taxes collected)
    With more people paying taxes the debt keeps going down and you start over at the top of this paragraph.

    Thats simplistic, but that's how it works.
     
  8. Oddball
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    Oddball BANNED Supporting Member

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    But the interest payments for this "free money", which come from taxes on the peasants, keep a-rolling in to the Fed banksters.

    Nice little scam they have, ain't it?
     
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  9. Two Thumbs
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    Two Thumbs Platinum Member

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    Madness

    $4.3 Trillion owed.

    And some of those countries get money from us. How do we owe Egypt when we give them $1.3 Billion a year?
     
  10. Article 15
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    Article 15 Dr. House slayer

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    Say we are in the black, realize that, and just stop paying the money to the Fed and erase the books. Good thing? Bad thing? Surprise?
     

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