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Nattering Heights, You do know that there are no facts to support your view of reality, right?
For growth to be sustainable, Economists agree that the ideal GDP growth rate is between 2% and 3%.
Oh! Golly gee willikers... Look at what our POSITIVE growth rates have been for decades.
It will never be paid off. America will eventually become part of China.
We only owe China a little over $1 Trillion. Which is a small fraction of the national debt. Japan holds almost as much of our debt as China. Not long ago, the debt held by China was concerning, but we have already inflated our way out of that. $1 Trillion is just a drop in the bucket now.
3/4 of our debt is domestic, while 1/4 is held by foreign nations.
And then there is national debt owned by the Fed, recently growing again at a drastic rate. That is our cheapest debt since the interest paid to the Fed on that debt reverts back to the Treasury. And as long as the Fed keeps the debt on its books, and/or rolls it over, it is essentially free money. Minus any inflation that it actually creates.
Nattering Heights, You do know that there are no facts to support your view of reality, right?
Attachment 229787
For growth to be sustainable, Economists agree that the ideal GDP growth rate is between 2% and 3%.
Oh! Golly gee willikers... Look at what our POSITIVE growth rates have been for decades.
That is inflation. Economists need to believe we still have growth. The corporations that pay them don't want to hear about the end of capitalism. The effects of a declining economy being spread thinner over a growing population can be seen in the lives of the working wage class. One ordinary job decades ago was enough to raise a family and own a home and a car. Now such a family would be homeless.
Sigh... I am just going to keep throwing the facts and common sense about how good fiscal debt management works into these many many chicken little threads about national debt, in the hopes that something sticks.
Nothing in most of these posts have ANY basis in reality. The FACT that the rising debt is a good thing that is preventing catastrophic losses and human misery is simple economics and is incontrovertible.
Quote:
As always, there are some who seem more concerned about the rise in federal budget deficits and public debt than by the rise in joblessness and losses of income generated by the shock. But prioritizing the restraint of debt in coming years over the restoration of pre-crisis unemployment rates is bad economics.
Joblessness and income losses in the wake of the coronavirus shock really are large enough to spark an economic depression that lasts for years. A rising ratio of debt to gross domestic product (GDP), on the other hand, will be mostly meaningless to living standards in the next few years. If baseless fears about the effects of adding to debt block this effective response, then it will cause catastrophic economic losses and human misery. It is often said that economics is about making optimal decisions in the face of scarcity. But we need to be clear what is and what is not scarce in the U.S. economy. The federal government’s fiscal resources—its ability to spend more and finance the spending with either taxes or debt—are not scarce at all. What is scarce is private demand for spending more on goods and services. We need to use policy to address what is scarce—private spending—with what is not.
I am not sure if this thread was started with any seriousness. But I am going to attempt to inject a serious note.
Debt in of itself is not a bad thing. Just read through any 10k filing of a successful corporate entity.
I think that debt became a 4-letter word because a large part of consumer debt is bad debt. The point of debt is that it takes money to make money. The national debt as a stimulus to the economy can be a good thing.
Taking out a 4% mortgage to buy a house that if this market continues will double in value is good debt.
Taking out a car loan for a car that will only lose value can be considered bad debt as most consumer debt over the past twenty years did not go toward enhancing wealth.
The reason no debt hurts your credit rating is that debt is the number one mechanism for enhancing wealth, as it is very difficult to become wealthy just on the sweat of your brow. Borrowing money, putting the money into the system, making money on that debt is the basis of the capitalistic model and is what makes our economy go round.
It is REALLY important for ourselves and for our country that people and more importantly congress who controls the purse strings stops with the rhetoric and educate themselves about strong financial fundamentals.
I have to disagree about buying and financing a house!
Many years ago when I got married, we bought a house thru first time home buyers, we got a low interest rate, but upon actually moving in and looking at the monthly payments, for 30 yrs, turned out, it was a terrible investment!
The house price was $82K, the monthly payments were around $750, had we stayed and made every payment, we would have paid close to $300K for a $82k house!!
I have to disagree about buying and financing a house!
Many years ago when I got married, we bought a house thru first time home buyers, we got a low interest rate, but upon actually moving in and looking at the monthly payments, for 30 yrs, turned out, it was a terrible investment!
The house price was $82K, the monthly payments were around $750, had we stayed and made every payment, we would have paid close to $300K for a $82k house!!
Craftsman82, Reading IS fundamental. I did not say, all financing of all houses throughout history was good debt. I said:
Quote:
Taking out a 4% mortgage to buy a house that if this current market continues will double in value is good debt.
I have to disagree about buying and financing a house!
Many years ago when I got married, we bought a house thru first time home buyers, we got a low interest rate, but upon actually moving in and looking at the monthly payments, for 30 yrs, turned out, it was a terrible investment!
The house price was $82K, the monthly payments were around $750, had we stayed and made every payment, we would have paid close to $300K for a $82k house!!
You need to learn the difference between Nominal dollars and inflation adjusted. At the end of 30 years that $82k house should be selling for well over $300k due to the magic (sarcasm) of inflation. When you lend money you have to charge interest just to stay even in purchasing power.
Isn't it obvious when they started printing money to pay for everything, they gave up on ever paying any of that debt off. They haven't had a balanced budget since Clinton and Gingrich worked one out (actually had a small surplus...I think it was 70 billion). If they had a trillion dollar surplus today (which might as well considered impossible) it would 30 years not counting the interest that's compounding.
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Nattering Heights, You do know that there are no facts to support your view of reality, right?
