Quote:
Originally Posted by LexusLover
I think borrowing is a good idea also.
But borrowing more than one can pay back in a reasonable period of time is not.
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Sorry about giving out the secrets
A "reasonable time" for a person on a house is now 30 years and people only live 80 years or so (and the first 20 don't count). People make say $100,000/yr and buy houses for $200,000, $300,000 or more. My dad made $5000 when he bought his house for $15,000 in 1960. What is "reasonable:"?
A sovereign nation isn't a person and ours has lived 235 years, the GDP is ~$17 Trillion, the debt is now about $16.5 Trillion or so. Is that big debt? Not when compared to the person above and not when compared to Japan today.
We print the money so technically we can pay off the entire debt instantly if we wanted to and can always and forever pay the interest and payments as long as they are in dollars. Except for Andrew Jackson (a homicidal sociopath of a President if there ever was one and not a good economist) who paid it off once and sent us into a depression, the intent has never been to pay it off. I won't even explain the reasons for that to you here.
The risks in paying it off have to do with how we pay it off. If we only print money, then we risk inflation, probably hyper-inflation if we do that fast. If we tax to pay it off (huge taxes) we risk throttling growth and sending the country into a deflationary spiral with high unemployment (which makes the debt relatively bigger and more borrowing necessary to jump start the economy and raise aggregate spending). The best way to pay down, not off, the debt IMHO is to manage it and grow our way out of big debt.
The
real adult question is how do we manage the economy and the debt along with taxes and borrowing to grow the economy and pay down the debt. Too bad almost no one is discussing that.
and relax... THE END isn't near, this is America
