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You really aren't listening. We aren't being denied loans because our debt is too high. It isn't. Debt-to-GDP has averaged 3.8% over the last 50 years. After Obama's budget, it will be at 4.1%.
We are having a problem because banks won't lend. They have too much money tied up in investments that have unknown value. They're about to fail because of that, and they won't lend.
So government spending is the only thing that will keep the economy going until the banks are working well again.
Bull. I've answered your question three times now. You have yet to respond with anything except one-liner insults.
What one-liner insult did I use? You do in fact call names to people that don't agree with your ideology. You're not interested in civil discourse and debate.
No this is not true at all. The last time it happened was under the Clinton administration, the GDP grew so large that Fed tax revenue increased just due to the bigger pie. Rates remained the same. This is the idea behind the Stimulus, increase Gvt spending so much so that increased money goes into the economy and grows the GDP larger. Then the GVT can lower the deficit by increasing taxes on the large income stream and/or lower Gvt spending (since the economy would now be on track)
"The last time it happened..."
That's just it. This has never been done before. We are spending more money than ever and now that foreign investors who would normally snatch up our T-bills are balking due to the magnitude of our reckless final three seconds all or nothing craps shoot the Fed is stepping in to purchase our own T-bills with worthless paper money that is backed by wishes and dreams. We are literally buying our own new and very real debt with imaginary money.
And here's the other thing, our economy is still fundamentally flawed. If we were non-competitive in the world market before we spent the equity in our homes that didn't exist, how will we be competitive now since the fundamentals of our economy haven't changed? If we had a business that lost money when it functioned as it was supposed to, we would close that business or fundamentally reshape it until it produced a profit. For the nation, that means exporting. How does throwing trillions of borrowed dollars down a rat hole make us a net exporter?
Seriously, how? If all of your credit cards were maxed out, you wouldn't max out the last one to pay off the others. I just don't get it.
It seems that a significant number of people are under the false assumption that the current economic crisis is a function of our debt; this is not the case. Yes, the growing debt is a significant problem, but it's not the cause of the current economic crisis that has cast its shadow on the entire global economy. We will have to address the national debt in the medium-term, but the debt isn't going to matter much either way if the global economy isn't stabilized first.
We can't do anything about the debt when unemployment is growing rapidly, when credit markets are dried up domestically and internationally, when stock markets across the globe are in wild flux and when the world's giant corporations, particularly the financial ones, are on the verge of collapse.
We have to spend money now to save these institutions from total collapse, to stabilize and reduce unemployment, to stabilize stock markets and to free up credit markets. Then, in the short to medium-term we need to improve regulatory capacity, both at the domestic and international level (through the Bretton Woods institutions, WTO and perhaps new institutions). At that point, once the economy is stabilized, recuperating and growing we can shift gears and focus on the debt. If we don't achieve these prerequisites, however, the debt isn't going to matter anyway; right now, the debt should not be our main concern.
It seems that a significant number of people are under the false assumption that the current economic crisis is a function of our debt; this is not the case. Yes, the growing debt is a significant problem, but it's not the cause of the current economic crisis that has cast its shadow on the entire global economy. We will have to address the national debt in the medium-term, but the debt isn't going to matter much either way if the global economy isn't stabilized first.
We can't do anything about the debt when unemployment is growing rapidly, when credit markets are dried up domestically and internationally, when stock markets across the globe are in wild flux and when the world's giant corporations, particularly the financial ones, are on the verge of collapse.
We have to spend money now to save these institutions from total collapse, to stabilize and reduce unemployment, to stabilize stock markets and to free up credit markets. Then, in the short to medium-term we need to improve regulatory capacity, both at the domestic and international level (through the Bretton Woods institutions, WTO and perhaps new institutions). At that point, once the economy is stabilized, recuperating and growing we can shift gears and focus on the debt. If we don't achieve these prerequisites, however, the debt isn't going to matter anyway; right now, the debt should not be our main concern.
I respectfully disagree with virtually everything that you just wrote. I do, however appreciate your civil tone; it's a nice departure from the majority of those that share your views.
I respectfully disagree with virtually everything that you just wrote. I do, however appreciate your civil tone; it's a nice departure from the majority of those that share your views.
What he says makes a lot of sense to me. Would you be willing to explain why you disagree?
Spend money on investing...in a new company, a new business....business succeeds, you get out of debt.
Would be great if it was that simple. Unfortunately, 50% of new businesses fail within 5 years and factors such as Economies of Scale and
the 6 Core Economic Principles (to name just a couple) come into play. It's also hard to get out of debt when you spend billions on items that are not producing a good or service which will generate income, but instead, giving money away.
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