U.S. Debt Now Equal to Economy

[rivalarrival]

Originally Posted by Eddie_T

We do need a third party, name calling is childish what we face is a debt that will never be paid though few of either stripe will admit it. When Obama says we have to pay our bills he cunningly avoids the whole truth which is, "Those ole mean republicans don't want me to borrow enough money to pay our bills." Someday we will have borrowed so much that our bonds and T bills will no longer be sought. I don't know at what point confidence will be lost, but that is what we are betting our future on. Meanwhile the debt keeps rising and only the interest is being paid (and 41 cents on the dollar of that is borrowed money).

The debt will never be paid down to a zero balance. If someone is willing to extend you a perpetual "loan" for what is effectively 0% interest, you would be a fool to ever completely pay it off. That's what the government has. They pay an interest rate that they control, an interest rate that is equal to the inflation rate, which is equivalent to you or I having a 0% interest rate on a loan.

Everyone understands this. We also understand that the people holding this debt are using it to maintain their own financial stability, and their financial contributes to the stability of the nation's economy, and through that, the nation as a whole.

Frankly, nobody cares about financial advice coming from someone who is incapable of comprehending this.

[YelloJeep]

Oops.... Double Post!

[YelloJeep]

Originally Posted by rivalarrival

The debt will never be paid down to a zero balance. If someone is willing to extend you a perpetual "loan" for what is effectively 0% interest, you would be a fool to ever completely pay it off. That's what the government has. They pay an interest rate that they control, an interest rate that is equal to the inflation rate, which is equivalent to you or I having a 0% interest rate on a loan.

Everyone understands this. We also understand that the people holding this debt are using it to maintain their own financial stability, and their financial contributes to the stability of the nation's economy, and through that, the nation as a whole.

Frankly, nobody cares about financial advice coming from someone who is incapable of comprehending this.

Be that as it may... I understand the whole borrow at zero interest, and why pay it off..... I would still be quite uneasy to let it get TOO out of hand. Call me crazy, but if what you say is true then why generate any tax revenue at all? Why not just borrow into infinity? I know that is dumb. BUT, how can that sound dumb, and what you said make sound fiscal sense?? Understand my point?

I guess you have to draw the line somewhere. The argument must be "where". Some are inching it toward infinity while others want (or say they want) to scale it back.

[Eddie_T]

The taxpayer is paying the cost to service the debt and borrowing 41 cents of every dollar to do so. The cost to service the debt could be better used elsewhere, and someday that cost will be so high that the foolishness will be revealed even to debt spending proponents.