Slade3200
Diamond Member
- Jan 13, 2016
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With a credit card bill the best solution is to eventually pay it off over time. Do you think it would be a good thing to pay off the US National Debt until it is all paid off?So what exactly are you comparing to the VISA bill?Ok, but our national debt is very different than a credit card. Interest on debt amountsPlease correct me if I’m wrong but as long as the population is growing and GDP growing then it makes sense for the debt to grow as well. Right?
No. Not right. As the Debt grows the interest on the Debt grows, just like only making minimum payments on your Visa bill.
Now the interest on the $23T Debt is about $450b a year. As the Debt grows to $30T and as interest rates eventually rise that interest will consume way too much of the Budget and drastic cuts will need to be made.
GDP doesn't always grow. Recessions happen now and then.
In simple terms its much better to have no Visa balance and no interest payments than to only be able to keep paying interest and not gaining on it.
One solution I heard was a "Convention of States" to force a Balanced Budget Amendment to keep the DC coxuckers from overspending.
Our national debt is nothing like a credit card debt. It is the mechanism in which we manage our economy and sovereign currency. The debt that we owe is largely owed to us the public (citizens, businesses, and banks) through treasury bills and bonds. If we paid it all back at once then we would be injecting Trillions of dollars back into our own Economy and inflation would wipe us out. Its a game of monopoly based on borrowing and spending.... Yes very different than a household budget or credit card bill. If you're thinking of it as a Visa bill then I suggest you do a little more research on what the national debt actually is.Please correct me if I’m wrong but as long as the population is growing and GDP growing then it makes sense for the debt to grow as well. Right?
No. Not right. As the Debt grows the interest on the Debt grows, just like only making minimum payments on your Visa bill.
Now the interest on the $23T Debt is about $450b a year. As the Debt grows to $30T and as interest rates eventually rise that interest will consume way too much of the Budget and drastic cuts will need to be made.
GDP doesn't always grow. Recessions happen now and then.
In simple terms its much better to have no Visa balance and no interest payments than to only be able to keep paying interest and not gaining on it.
One solution I heard was a "Convention of States" to force a Balanced Budget Amendment to keep the DC coxuckers from overspending.
Nope. You are conflating two different lumps of money.
1. The $23T National Debt what Treasury funds thru borrowing to pay for the $4T federal budget.
2. The Federal Reserve Balance Sheet, currently at $4.8T. Federal Reserve Board - Recent balance sheet trends
View attachment 308746
The Federal Reserve manages the interest rates and money supply to target 2% inflation and full employment.
My analogy to a Visa bill is only showing what happens when you keep borrowing and borrowing and the interest payments ruin your finances.
1. The $23T Debt is analogous to a maxed out Visa card balance where all you can afford to pay is the interest, you can never pay down the debt.
2. A much better financial situation is "pay as you go" every month so you are not paying interest on the borrowed money balance.