Why The National Debt Is Good For The Country

Discussion in 'Politics' started by Sundial, Aug 1, 2011.

  1. Sundial
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    Sundial Class Warrior

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    1. Debt enriches the private sector.

    When the government issues debt, it spends the same amount of money as the amount it borrows. Money flows from the private sector through the government, and back into the private sector again. No money is lost or made in this process. The only net result is the creation of new treasury bonds, which enrich the private sector.

    2. The debt need not be paid back.

    So long as people want to hold government bonds, and the government can afford to pay the interest, there is no need for the government to pay back money it's borrowed in the past.

    3. Paying interest does not make the country poorer.

    When the interest is paid to Americans, there is no net result. When it's paid to foreigners, they can save the dollars or spend them on American goods and services. Either way it's good for us.

    4. Debt is the basis of our financial system.

    Dollars are backed by US debt. If the debt were paid off, it would result in the collapse of our economy.

    5. We can't default on our debt, unless it's voluntary.

    Our debt is denominated in dollars. We can create as many as we want. Therefore we can't run out of dollars to pay our debt.

    6. We are not "borrowing from our grandchildren."

    Should our grandchildren choose to pay down our debt (and there's no reason why they should), the payments will go to our grandchildren, not to us. (We'll be dead by then.)
     
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  2. Sundial
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    Sundial Class Warrior

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    7. When the government issues debt, it enriches the private sector, which encourages people to spend and invest. When people spend and invest, they create jobs and improve the economy.
     
  3. Full-Auto
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    We control the vertical.

    We control the horizontal.

    We control all that you see and hear.

    THE DEBTS OUTER LIMITS
     
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  4. oreo
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    oreo Gold Member Supporting Member

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    :lol::lol::lol: Yeah Right--:lol::lol: We see how well that's working with Obama's flood the basement economic policies--specifically his 1 trillion spent on an economic stimulus bill.

    The Federal Government is currently borrowing .43 cents on every dollar it spends. Today there are 18,000 baby-boomers entering social security and medicare resulting in another 64 TRILLION in unfunded liabilities--resulting in $534,000.00 per household debt in America.

    In 10 years--even after this debt ceiling bill passed we will be 21 TRILLION in debt.

    $1 billion dollars.jpg

    1 billion dollars--$100.00 bills stacked on palets.

    $trillion dollars.jpg

    1 trillion dollars--$100.00 bills stacked on palets. NOTE--how small the man is in this chart.

    Just multiply the trillion dollar chart by 21 to get a real good look at our debt in 10 years--:confused:
     
  5. Flopper
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    Flopper Gold Member

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    I don't know I would say debt is good but there's a lot of truth in what you say. Running a business or the government of a cash basis means you bypass a lot a lot of good things, like the putting a man on moon and the interstate highway system. However, when you consistently grow debt faster than GDP growth, you will have problem. Interest will become such a large expense that it threatens your ability to continue borrowing and your credit standing with your lenders.
     
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    Last edited: Aug 1, 2011
  6. Mr. H.
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    Mr. H. Diamond Member

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    You can't keep creating something from nothing.
    Before long, something will come calling on nothing.
    And if nothing never asks anything of something, then something eventually becomes nothing.
     
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  7. Sundial
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    When the economy collapsed at the end of Bush's second term, a lot of Tea Party types were out buying shot guns shells and Kruggerands. The reason it didn't get to that point was because of government intervention.

    The government could bring the unemployment rate down even more. But it would require even bigger deficits than the ones you're complaining about now.
     
  8. Sundial
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    Sundial Class Warrior

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    There is a point where debt becomes a problem. But we're not there. Japan has twice the debt that we do, as a ratio to GDP, and interest rates even lower than ours. Our interest rates are at historic lows, and the amount of interest we're paying is manageable.

    Reducing unemployment, on the other hand, would improve the governments situation, because it would bring in more income in the long run.
     
  9. hellofromwarsaw
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    But NOOOOOOOOO....pfffft!
     
  10. Wacky Quacky
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    Except for the fact one of the biggest problems with running such a high debt is the US dollar gets devalued. When that happens the rest of the economy takes a major hit. People buy less since their money doesn't go as far anymore, that means less demand and less jobs, and the economy spirals from there. Even in a business running a debt isn't good, because if the economy takes even a little hit then you're screwed. But run your business on cash and you can make a killing during that type of economy, buying up all of the failing businesses dirt cheap.

    Spin it any way you want, debt is never good in any situation.
     

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