Originally posted by: dawks
Originally posted by: TehMac
Can someone please tell me the bad things of our government being in debt. As long as the people in the majority aren't and are flourishing, why should it matter?
One thing people tend to over look is that holding a debt costs money. There are interest payments that have to be paid on a debt. IIRC, something like 15-20% of Canada's annual federal budget is spent on just servicing the debt. Thats 10's of millions of dollars that could be spent on health care, education, or other purposes. While the interest payments the U.S. makes annually are a much smaller portion of the annual budget, I believe they may be in the hundreds of millions per year. Imagine just throwing away all that money every year.
Originally posted by: sierrita
Originally posted by: TehMac
Can someone please tell me the bad things of our government being in debt. As long as the people in the majority aren't and are flourishing, why should it matter?
In short, other countries "own" our debt; they could "call our note" if they so desired. Some of these "other countries" include China.
Yup. China 'owns' so much of the U.S. debt, if they decided to call it in, they could potentially collapse the entire U.S. economy in a matter of hours. Of course this would lead to the death of the rest of the World Economy, including the Chinese economy shortly there after, so its unlikely they'd do this.
Originally posted by: Mill
Originally posted by: bobdelt
as I read more and more of the post, im shocked about how dumb the people here are. The USD isnt going away. The national debt is on pace to be paid off within 10 years. Furthermore, the national debt doesnt actually mean much - people always talk about how bad it is, but none can really say why (most economists agree that a small national debt can be a good thing).
You are higher than a kite. The national debt is nowhere near being paid off in 10 years. You are thinking of the deficit, and even then we still probably won't be running a surplus in 10 years.
At the rate Bush is going it would be difficult to turn a surplus even in 10 years. It would require such huge tax increases and spending cuts that it would probably crush an already suffering economy.
Again as I said before, the U.S. dollar will need to decline or devalue further if the States continues to run such a large trade deficit. Either the U.S. government can somehow reduce imports and/or increase exports, or purposefully devalue the currency. I guess we'll see how long this can last at its current rate. It may be sustainable for a long period simply because of the size of the U.S. economy. Time will tell.
Facebook
Twitter