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View Diary: You can't borrow your way out of debt- what? (44 comments)

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  •  Depends (0+ / 0-)

    Japan has been trying for 20+ years to borrow its way out of debt. It has a debt to GDP of close to 250%. It has now embarked on a last ditch hail mary attempt at printing itself to prosperity ... or at least survival. The numbers say its chances are slim. It had already traveled too far down the debt path.

    Whether you should borrow and how much you should borrow depend upon how much debt you already have, the cost of the debt, and how it will be spent.

    The US started this crisis (thanks to Bush) with far too much debt already. Much of the money borrowed has not been spent wisely (wasted in trillions for defense in a changed world where having the best fighter jet is useless against pressure cookers.).

    Take a look at what has happened to the job market, not just since the recession, but over the last 10 years. Construction and manufacturing jobs are way down (20% ish) and the new jobs are in bars and restaurants and in health care (like home care) and temp employment.

    Borrowing only makes sense if there is a realistic and affordable plan. So far it has all been band-aids. There has been no real reform (especially of the financial system). As a result all the money borrowed is trickling (well flooding actually) up to the 1%.  The average Joe sees nothing.

    There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

    by taonow on Sun May 12, 2013 at 08:09:23 PM PDT

    •  that's too glib (0+ / 0-)

      Half of Japanese govt debt is "owed" to the central bank which, of course, remits interest payments to treasury. So debt service is not bad at all

      But I agree, it depends on what you spend it on.

      There are long term problems with the US economy that cannot be fixed by short term stimulus, but letting a recession turn into a depression won't help either.

      self-appointed intellectual cop

      by citizen k on Sun May 12, 2013 at 08:21:41 PM PDT

      [ Parent ]

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