Debt fanatics are stupid.

 

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What a buzz kill.

 

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For a nation things like infrastructure, buildings, and equipment (tanks, planes, boats, etc) are comparable to a house.


You have not really given any details for your idea from what I can tell so this conversation is really pointless.

 

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The only truth to the debt concern is that we aren't solving our core domestic labor issues. You SHOULD spend money to get out of trouble. But you should not spend money in a vain attempt to not feel bad while you spiral further and further into trouble.

The government has made many stupid moves to get us here. now they need to make it right and that will mean more debt, but so far we are getting the more debt and not making anything more right.

I'm not a debt avoider, but I am a stupid avoider. We need to try to avoid some more of that.

 

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When a household is drowning in credit card debt, you don't pay down the debt. You just start making more money! Magic! Those off shored jobs will be coming back any day, Johnny Homeowner, so get ta spending!

 

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I am not sure what 4 is out of the Outpost population, but regardless I am honored to be part of the 1%. Again.

 

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Just like the US already has land, most people can find a piece of cardboard to sit on, but they still spend money on a house. Even though from a short term spending perspective the cardboard looks like an obvious money saver. The analogy works even though you wish people would just make do with cardboard.

should: borrow money to go to college, buy new suit for interviews, buy beater to get to job

should not: borrow money on credit cards to pay for luxuries while unemployed hoping things might get better and you can pay them back.

 

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Always left out of these rants is how national accounting works.


If you have a trade deficit, then you must have a budget deficit (either debt or a reduction in savings). This budget deficit can be in the private sector, the public sector...or both. But if you buy more than you sell you must have a deficit.


We like to whine about spendthrift politicians overspending or 1%'ers using their influence to reduce their taxes to historical lows...but these arent really the cause.


If you keep trade deficit and hike taxes, you reduce gov't debt by shifting it to the private sector. Same thing if you slash spending.


The last several years the private sector has deleveraged mightily and the trade deficit has lessened....but basic accounting requires the govt to run a bigger deficit if the private sector continues to deleverage.


So you have to decide how to tackle this. If you want to force down public debt then you are requiring a change in the trade deficit or an increase in private debt.


Ideally you help the private sector deleverage by narrowing the trade deficit with a weaker dollar and you expand the public deficit. The economy gets a bonus by shifting to public debt since the financing costs are so much lower.


Often you see people scream for less public debt, less private debt and a stronger dollar to blow up the trade deficit.

The US has a lot lower interest rates than your credit card. The scenario is more like the economy is shrinking so your household consumption goes down. This results in less demand for production which results in more firings which results in less household consumption. Multiple this by millions and you see how the shrinking of the household budget impacts the economy. Those who favor austerity think that we should cut consumption more which will in turn cut production more which will in turn cut consumption more.


When people point out that they are just making the economic downturn bigger they try compare the US debt to credit card debt and think they are saying something intelligent.

 

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