Originally Posted by Eddie_T
Your analysis and basic understanding seem a bit inadequate. In the long haul where would investment money come from if interest rates are not higher than the inflation rate? People and nations are already turning to gold and silver for investment.
The main vehicle for government borrowing is the T-bill. A t-bill is an incredibly modest investment, purchased for stability, not return. In terms of return, it is in the category as tangible goods, but subject to different volatility.
My examples have been on the optimistic side, but not excessively. The point is that borrowing DOES increase our real wealth relative to not-borrowing, even though we pay interest. It is the reason that t-bills are a store of value, not a highly lucrative investment.