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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.
When the dollar falls against other currencies, foreigners buy more US goods and services, which increases employment in our country.
Inflation, on the other hand, is low, and is likely to stay low until unemployment falls. When unemployment falls, government revenues go up and spending goes down, automatically.
You're gonna' use Japan as an example to follow? They've had at least 10 years of economic stagnation due in large part to their debt.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.
The problem is not the debt but rising deficits. We could sustain the current debt forever but we can't have it increasing at the rate it has over the last few years.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.
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.
Well answer me this. If we can just print all the money we need why don't we do that and not collect taxes? You guys are the biggest morons I've ever had the displeasure to meet. I swear you live in the land of leaping lizards, unicorns and lollipops
Hell we can just line Pensylvania Avenue with money trees for the retardeddimocrats to take whenever and how much ever they feel like.
Bullshit! We had almost no inflation before 1913 when the IRS was created and Income Tax implemented. Since then the dollar has lost 95% of it's value. Lyin' fuck!Taxes both regulate the supply of money and create demand for it. Failure to collect taxes creates inflation.
More bullshit! Inflation is evident to whomever does any amount of shopping.Inflation is not a problem right now, however, if it becomes problem, we can raise taxes then.
Um...Greenspan left Rand's little cabal decades before he became Fed Chairman.Fine, then you ALSO doubt ALAN GREENSPAN.
You remember him, dont you?
The FED RESERVE's Ayn Rand loving, ANTI-REGULATION DARLING OF THE RIGHT?
And how you can try to frame the head of the biggest fiat money monopoly in human history an anti-regulation type is beyond comprehension.
But don't let bothersome little things like facts get in the way of building a better strawman.
Capitalism Magazine - Alan Greenspan vs. Ayn Rand and Freedom
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.
When the dollar falls against other currencies, foreigners buy more US goods and services, which increases employment in our country.
Inflation, on the other hand, is low, and is likely to stay low until unemployment falls. When unemployment falls, government revenues go up and spending goes down, automatically.
That would be fine if employment was going up as a result. But what we're seeing right now is the dollar losing value and we're losing jobs, which is a double knockout for our economy. Also, even if the devaluing of the dollar was creating jobs, the amount of purchasing power the wages would have from those jobs would be so piss poor that everyone would have to work two or three jobs just for the bare necessities.
You're gonna' use Japan as an example to follow? They've had at least 10 years of economic stagnation due in large part to their debt.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.
The gov't has done nothing to improve the jobs situation here. In fact, they've just made it easier through trade agreements to ship jobs overseas.
I wish I could NEG you again!
The problem is not the debt but rising deficits. We could sustain the current debt forever but we can't have it increasing at the rate it has over the last few years.
There are three big guns in the government economist tool bag for fighting a recession, government spending, lower taxes, and lower interest rates. Increasing government spending is out of the question. Congress and the president has committed themselves to lowering spending. Any reversal would create another crisis such as we just faced. Income taxes are the lowest they have been since before the Great Depression. Interest rates are about as low as they get. There just isn't a lot the government can do to stimulate the economy over the short haul.
IMHO, we will have another recession or at least an economic slow down spurred on by worries over the debt rating downgrades and cutbacks in government spending. Sucking a hundred billion or more out of the economy will have a negative effect on the economy. What few consider is that a lot of federal funds flow to state and local governments. Cuts at the federal level will create problems at the local level. Also if US debt is downgraded, there will probably be some states and local governments that will be downgraded because of their dependence on federal funding. The economy has to reach a low point before it can rebound which has apparently not happened. Whatever happens thou, it will be without any real government intervention.
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.)
Manageable debt.
Its what every sucessful business has done.
Imagine if you were hired as a CEO and tried to run the company with a balenced budget and NEVER borrowed money.
You would be crushed by the competition.
Nearly every family in the world borrows money to buy big items like homes and cars.
Government removes capital from the economy.
Government removes capital from the economy.
Where does it remove it to?
Government removes capital from the economy.
Where does it remove it to?
Government removes capital from the economy.
Where does it remove it to?
Poor people who are unproductive. Military hardware that sits in inventory. Waste and fraud.
Where does it remove it to?
Poor people who are unproductive. Military hardware that sits in inventory. Waste and fraud.
Poor people are part of the private sector. Even if they weren't, they spend their money on things like groceries and rent, which are also part of the private sector.
Military hardware is built by private companies, which are paid for their work. They use that money to (among other things) pay their workers. Those workers, and the companies they work for, are all part of the private sector.
Waste and fraud means that some money has been transferred from the government to some person, who either didn't deserve it, or didn't do what he was supposed to do to get it. Either way, it's a transfer of money from the government to the private sector.
None of those are examples of the government removing money from the economy.
Manageable debt.
Its what every sucessful business has done.
Imagine if you were hired as a CEO and tried to run the company with a balenced budget and NEVER borrowed money.
You would be crushed by the competition.
Nearly every family in the world borrows money to buy big items like homes and cars.
