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View Diary: All This Has Happened Before (371 comments)

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  •  Why not? We've always borrowed. (0+ / 0-)

    And we never pay back the borrowing!  The debt from WWII hasn't been paid back.

    Our economy is leveraged the same way you can live in a better house than you could afford to pay cash for.  Its not a bad thing and the result is a strong country.  

    •  Wrong-wrong-wrong. (1+ / 0-)
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      The house gets paid for over 25 or 30 years. When a 20% down payment was required and prices were stable, that system worked fine.

      The analogy to national macroeconomics doesn't hold up.

      Debt weakens the country. Takes revenue from taxes and dumps it on no-product debt service.

      Economics is dry and mathematical. Sorry about that.

      Droogie is as Droogie does....

      by vets74 on Sun Apr 19, 2009 at 09:13:47 AM PDT

      [ Parent ]

      •  Our mortgage will likely be paid off when we die; (1+ / 0-)
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        the country is not going to die.  

        Debt gives the government the means to invest.  I remember when the NY State Thruway was being built when I was a kid and the state took on a big debt for it.  It was a great investment.  

        •  NY State balances its budget. (0+ / 0-)

          That's why the Thruway highways were moved to a separate legal entity.

          You are confusing project-oriented borrowing with generalized debt.

          Micreconomics in a public enerprise vs. macroeconomics at the level of national accounts.

          The Thruway has next to nothing to do with the $1,600,000,000,000 in bonds held in China. Generalized deficit spending can not be increased at large amounts forever.

          It is impossible -- the national currency collapses in value.

          Droogie is as Droogie does....

          by vets74 on Sun Apr 19, 2009 at 09:30:39 AM PDT

          [ Parent ]

          •  What do you think is going to happen? (0+ / 0-)

            What is the dire consequence that you envision?  

            I'm not crazy about how high Defense spending is but recognize there is great value to us in being the strongest country on earth.  That is spending from the general budget, not a separate entity.  

            One of the reasons we cannot have a horror like the Great Depression again is government spending on Social Security payments that pumps money out to the public on a regular continuous basis.  People can always move in with the old folks.  Going back 30 years, I've been aware of a movement to cut back on Social Security because of a looming deficit.  I've heard it called a "Ponzi Scheme."  But Social Security is a broad asset to the economy and well-being of Americans.  

        •  Some of our debt... (0+ / 0-)

          Some of it is building roads and bridges and then paying for them as we use them.

          It would be nice if we could get out in front of the debt and pay cash, but that's not likely with our resistance to paying taxes.

          At least we get to borrow at federal bond rates and not charge card rates.

          15 to 6. Pulled ahead as soon as the gate opened and never looked back....

          by BobTrips on Sun Apr 19, 2009 at 12:44:43 PM PDT

          [ Parent ]

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