boedicca
Uppity Water Nymph from the Land of Funk
- Feb 12, 2007
- 59,439
- 24,109
- 2,290
Hm, if there's only discount on debt for houses, I still don't understand how exactly public debt could translate into personal debt. Is there any way to pinpoint where exactly this transference happens, through what mechanism?
Or, are personal and public debt not causally related and do they merely share a common cause, such as the prevailing attitude of people in general?
Here's how: public debt is seviced by the taxpayer. The more public debt, the bigger the burden on the private sector to pay more and more taxes.
There is also the aspect of public debt sucking the air out of the credit markets, crowding out the private sector. This is what is happening at the Federal level today. The Fed has loaned money at virutally 0% interest to the MegaBanks. They in turn are buying up Treasuries (to fund the Federal Government) and earning close to 4%. What a con game.