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10/20/2017 1:01:18 AM
9/22/2017 12:11:25 AM
Posted: 9/16/2005 12:28:05 AM EDT
[Last Edit: 9/16/2005 12:58:05 AM EDT by kill-9]
Even before Katrina, the U.S. was in debt to the tune of nearly $8 trillion. Now the President proposes rebuilding New Orleans with almost entirely Federal dollars. How much will THAT heap onto the national debt? Another trillion? How much debt can we stand to shoulder before it starts having a real impact on the economy? Do our creditors just not care how in debt we are? Any economists in the house tonight?

Edit: spelling
Link Posted: 9/16/2005 12:52:22 AM EDT
tagged
Link Posted: 9/16/2005 12:53:17 AM EDT
Paper money is inherintly worthless.

Its only worth what people think its worth.

As long as people think our money is worth something it will be worth something.

So in other words you better hope people dont stop believing.
Link Posted: 9/16/2005 12:55:43 AM EDT
1) It is spelled trillion.

2) As a percentage of GDP, our public debt is nothing to get excited about.
Link Posted: 9/16/2005 12:56:55 AM EDT

Originally Posted By OFFascist:
Paper money is inherintly worthless.

Its only worth what people think its worth.

As long as people think our money is worth something it will be worth something.

So in other words you better hope people dont stop believing.



Ya, and gold has some magic value that is fixed by the powers above, huh?

Nothing has value past what other people believe it has.
Link Posted: 9/16/2005 1:00:06 AM EDT
[Last Edit: 9/16/2005 1:00:34 AM EDT by kill-9]

Originally Posted By Tomislav:
As a percentage of GDP, our public debt is nothing to get excited about.



What is the current percentage and at what point does it become something "to get excited about"?
Link Posted: 9/16/2005 1:01:18 AM EDT
[Last Edit: 9/16/2005 1:02:03 AM EDT by OFFascist]

Originally Posted By Tomislav:
Ya, and gold has some magic value that is fixed by the powers above, huh?



I never claimed it did, but in general it is worth more to most people than mere paper.


Nothing has value past what other people believe it has.


exactly.
Link Posted: 9/16/2005 1:47:41 AM EDT
Depends. If a guy making $10 million a year has debts of $200,000 it's no big deal. If someone making $10K/yr has that much debt, it's a big deal.

It's been as high as 115% of GDP after WWII. Right now it's something like 38%.
Link Posted: 9/16/2005 1:53:42 AM EDT

Originally Posted By OFFascist:
I never claimed it did, but in general it is worth more to most people than mere paper.



'Mere paper'? Lemme guess, you have gold stashed away for when the economy collapses, right? Hate to tell you, gold will never again be a accepted medium of exchange in the modern industrialized world. Sure, it may (or may not) make a good addition to a portfolio, but so does Google stock.


Link Posted: 9/16/2005 1:56:47 AM EDT
[Last Edit: 9/16/2005 1:57:38 AM EDT by OFFascist]

Originally Posted By Tomislav:
'Mere paper'? Lemme guess, you have gold stashed away for when the economy collapses, right?



Nope, not at all.

Bullets and guns > Gold


Hate to tell you, gold will never again be a accepted medium of exchange in the modern industrialized world.


I partially disagree.

[edit]there is more to life than just money.[/edit]
Link Posted: 9/16/2005 1:58:27 AM EDT

Originally Posted By kill-9:
What is the current percentage and at what point does it become something "to get excited about"?



Currently, about 65%. That is where France and Germany and some other industrialized nations are at. Japan and Italy are over 100%, and nobody really cares, as long as they meet their obligations under the debt.
Link Posted: 9/16/2005 2:40:38 AM EDT
The way it works is the USA can run up a pretty big debt, because it has pretty good credit.

When the USA's income is less than outgoing that deficit is covered by basically "borrowing" the rest. Sort of like the same deal as you buying a house. The house costs more than you can lay out at once, so you take a loan out.

On the surface, this isn't the best way to run a country's economy, but some deficit spending can be good. Just like you going into debt to buy a house can be good for you in the long run, things like going into debt to build a highway system, that returns millions more and allows the economy to grow by leaps and bounds is a good reason to spend.

Anyway, when the US Treasury needs to borrow, it does things like issue T-bills. These get bouught by private individuals and by other countries. The attraction is that it was like money in the bank for a foregin country that might not otherwise have a great economy. Your nation might be all messed up, but you still had something of value to back-up your own currency when you had an IOU from Uncle Sam.

If your nation was doing big business with the USA, it payed to allow the US to borrow, because then they bought your stuff. Japan is the number one holder of our debt. China is another big one. They aren't alone either. The consumption of the USA is the reason the world has a global economy at all. To keep that going, everybody is willing to extend credit to the USA. The more we spend, the more the world makes, the more credit we need, so the more debt the world allows, so the more we spend, and the more the world makes....

The USA has great credit, so it can borrow ALOT. One big reason is everything that's worth trading is traded in US dollars. Other reasons are that in order to keep the golbal economy's engine (US consumption) going, many countries keep their currency lower than ours to have a favorable trade stance. China's Yuan was pegged at a fixed spot to the dollar. Now that the Yuan is actually floating (they went off the dollar peg about a month ago) they use a "basket". To control and adjust the Yaun, they change the mix in the basket to get the value they want. If they want it higher, they add Euros, if they want it lower, they add Pesos, or whatevers.

So it's alot like the credit card schemes. Banks want you to use the credit cards so you buy more from the store (that they own), so when you reach your credit limit, they simply raise the limit. Soon everone is horribly in debt, which is where the world sits now.

The USA is obviously in debt up to it's ass, but all these other countries are also on the hook and along for the ride with the dollar. So what happens to our economy also effects China, Japan, UK, etc all out of proportion to what it normally would, because they own so much of our debt. Just like the above bank, if you quit running up your credit card bill, you won't be buying things at their store, so they can't make more money.

Everyone's kinda edgy about the dollar's value, because basically all the eggs are in one basket. But that's the way it is right now, so if the USA goes under, everyone does.

Link Posted: 9/16/2005 3:19:10 AM EDT
Ross

Good post; too bad nobody here can read.


Link Posted: 9/16/2005 3:23:18 AM EDT
Ronald Reagan proved that you can have deficits and a thriving economy. The only problem during his adminsitration is that they didn't control government spending. The tax cuts increased the income of the federal government but they also spent a helluva lot more. I am not worried about a deficit as long as we can keep inflation and interest rates low. Like it or not, we have to rebuild New Orleans and we are in the middle of a war. Both are very expensive
Link Posted: 9/16/2005 5:03:37 AM EDT
[Last Edit: 9/16/2005 5:04:14 AM EDT by kill-9]
Ross, you seem to have a pretty good handle on the situation. What economic news would cause you concern? As in, serious big-picture concern.
Link Posted: 9/16/2005 5:09:16 AM EDT
Generally speaking, as Ross describes in a much more detailed sense, the US has virtually unlimited borrowing capacity.
Link Posted: 9/16/2005 5:23:41 AM EDT
The US can sustain not ONE CENT over 87 trillion!
Link Posted: 9/16/2005 5:23:51 AM EDT
tag
Link Posted: 9/16/2005 5:41:07 AM EDT

Originally Posted By Tomislav:

Originally Posted By OFFascist:
Paper money is inherintly worthless.
Its only worth what people think its worth.
As long as people think our money is worth something it will be worth something.
So in other words you better hope people dont stop believing.


Ya, and gold has some magic value that is fixed by the powers above, huh?
Nothing has value past what other people believe it has.



Interesting point. Gold is just a shiny rock, mineral, whatever. Man could just as eaily have made horse turds something of high value to base an economy on.

If the national/global economy just went into oblivion, the real currency that would have any value would be the skills of the people in the community. Granted a large society could never function that way, but when you bring things down to the lowest common denominator wealth isn't worth nearly as much as what someone can offer to the people around him.

Probably why politicians love their jobs so much... they get paid lots of money and have not one tangible skill.
Link Posted: 9/16/2005 7:09:48 AM EDT
We are looking at a $13 trillion plus GDP for 2005. Generally one starts to worry when the country has a debt approaching twice its GDP (that would be $26 trillion for the USA in 2005).

GunLvr
Link Posted: 9/16/2005 7:16:34 AM EDT
Also remember that if the U.S. had NO debt, there would be no U.S. savings bonds. Many people like the options of U.S. Savings bonds as a safe investment option.

And it would creat havoc with economists and financial advisors. Many of their calculations are made using short term T-bills to determine the cost of risk-free investment, which is then used as a basis for calculating the risk of other forms of investment.
Link Posted: 9/16/2005 7:17:15 AM EDT
[Last Edit: 9/16/2005 7:18:51 AM EDT by Torf]
Rebuilding the city will spur economic development. Don't forget it. The government has no money other than what it takes from the private sector.

The government can sell more T-notes. Americans hold much of the National Debt.

This isn't any more of a concern than it was when democrats were trashing Reagan for it in the 80's.
Link Posted: 9/16/2005 7:19:46 AM EDT

Originally Posted By OFFascist:

Originally Posted By Tomislav:
'Mere paper'? Lemme guess, you have gold stashed away for when the economy collapses, right?



Nope, not at all.

Bullets and guns > Gold


Hate to tell you, gold will never again be a accepted medium of exchange in the modern industrialized world.


I partially disagree.

[edit]there is more to life than just money.[/edit]



I do not believe there is enough gold in the world to act as a medium of exchange for the USA. Perhaps France, but not us. Were we chained the a Gold Standard, I'm sure our economy would be crippled.
Link Posted: 9/16/2005 7:31:36 AM EDT
Ross is correct, for the most part.

However, our problem is not the National Debt, but the Nat'l DEFICIT.

We can't continue to spend, year in and year out, more than we bring in. Fundamentally, we need to cut back, and balance the budget. It's not that the current level of either the debt or the deficit is that big a deal, it's that if we don't cut back, and congress continues to spend the way they are, we eventually will be in a problem.

It's absolutely true that it's no big deal now. But it's kinda like social security - we're paying the bills NOW, but we need to control it so that we can pay the bills down the road.
Link Posted: 9/16/2005 7:34:10 AM EDT

Originally Posted By happycynic:
Also remember that if the U.S. had NO debt, there would be no U.S. savings bonds. Many people like the options of U.S. Savings bonds as a safe investment option.



Explain that, if you don't mind. Not sure I understand it. I'm assuming if there were no debt that there would be no need for savings bonds because savngs bonds are the ;gov's way of borrowing money from the citizens with the promise of a certain amount of interest to be paid back on top of the amount borrowed over a predetermined period of time. No debt means no need to borrow... correct?




Originally Posted By Torf:
Rebuilding the city will spur economic development. Don't forget it. The government has no money other than what it takes from the private sector.



It'll spur economic development but who's ultimately footing the bill? The .gov? They're wirint checks to be cashed from our earnings. The .gov's money isn't their money... it's ours.

I understand, though, that it's spur development and hopefully in long term it'll offset the expense incurred by us... but they way the .gov spends money any chance of a balance seems improbable.
Link Posted: 9/17/2005 2:53:43 AM EDT

Originally Posted By kill-9:
Ross, you seem to have a pretty good handle on the situation. What economic news would cause you concern? As in, serious big-picture concern.



I'd start to worry if Asia panics.

There are several things that are expected to happen. There is a housing bubble and that will burst sometime. The dollar is going to go down in value as well. Those are both expected and not anything that will cause the end of the world. Frankly it's the market adjusting itself. The dollar's overvalued now, so it will drop. If for some reason it crashes bad, then watch Asia.

Starting 2006, Iran will offer oil in Euros. Russia probably will as well. I don't think the world will switch overnight to selling oil in something other than dollars though. The Euro itself is strong, but Europe is fairly stagnant economically. I think it will signal the end of the monopoly the dollar has had, but it's not really that big a deal in it's own right.

If there's trouble though, you'll see Asian nations start selling off the US Debt they're holding. That's what I'd look for as a signal that really rough seas are ahead.

Link Posted: 9/17/2005 4:47:25 AM EDT
tag
Link Posted: 9/17/2005 5:14:01 AM EDT

Paper money is inherintly worthless.

Its only worth what people think its worth.

As long as people think our money is worth something it will be worth something.

So in other words you better hope people dont stop believing.





BINGO! WE HAVE A WINNER.
Its about as good as an IOU written on paper.
Link Posted: 9/17/2005 5:18:18 AM EDT
BU$H
Link Posted: 9/17/2005 5:39:35 AM EDT

Originally Posted By Ross:
There is a housing bubble and that will burst sometime.



Y'know, I keep hearing about this "housing bubble", so I've been putting off buying a house. Any guesses as to when this is going to happen?
Link Posted: 9/17/2005 8:00:25 AM EDT

Originally Posted By pathfinder74:

Originally Posted By happycynic:
Also remember that if the U.S. had NO debt, there would be no U.S. savings bonds. Many people like the options of U.S. Savings bonds as a safe investment option.



Explain that, if you don't mind. Not sure I understand it. I'm assuming if there were no debt that there would be no need for savings bonds because savngs bonds are the ;gov's way of borrowing money from the citizens with the promise of a certain amount of interest to be paid back on top of the amount borrowed over a predetermined period of time. No debt means no need to borrow... correct?



You are correct sir. Without incurring debt the government would have no reason to issue savings bonds. This is also part of the reason why the debt isn't that big of a problem. Yeah, some foreign governments own bonds, but alot of them are owned by our own citizens, meaning that we are in debt to ourselves.
Link Posted: 9/17/2005 8:19:32 AM EDT
Did you guys get an F in economics 101 or what? I want to address this "idea" that things have value because people "belive" they do. your kidding right? Never heard something so foolish in my life. Things have value because people need them not because they think they need them. Your confusing currency which is basically worthless as a "good" or "resource" with real things that money can be exchanged for. For example if i have 20 pounds of Uranium-235 it has REAL value. it can be used "to do" something. The Iranians who want to buy it from me dont make it valuable just because they "belive" it. It can do something that chickens or copper wire can't. Same with Oil, it actually contains energy so it can "do" things that say water or Cows can't hence it has a value. it's value can go up or down based on the market but since it is a nessessity it will always have some value. Even dirt and water are sold in the market place because they have "real" value not "perceived" value.
Link Posted: 9/17/2005 8:28:17 AM EDT
Link Posted: 9/17/2005 8:38:58 AM EDT

Originally Posted By t-stox:
Did you guys get an F in economics 101 or what? I want to address this "idea" that things have value because people "belive" they do. your kidding right? Never heard something so foolish in my life. Things have value because people need them not because they think they need them.



Sigh. If I mail you a Econ 101 text, will you promise to read it? At least look at the pretty pictures and graphs?

Nothing has value past what you place on it. Period. A $30,000 car is not worth $30,000, unless you agree it does and pay for it. A $10 meal is not worth $10 unless you decide it is worth it and pay $10. Nothing has value past what you believe it has.



Your confusing currency which is basically worthless as a "good" or "resource" with real things that money can be exchanged for.



Currency is simply the way we express value. Barter just ain't what it used to be.



For example if i have 20 pounds of Uranium-235 it has REAL value. it can be used "to do" something. The Iranians who want to buy it from me dont make it valuable just because they "belive" it. It can do something that chickens or copper wire can't.



That makes little sense. The uranium that you are going to sell the Iranians has value to them, but not to me. I realize that the extra costs of selling the uranium (setting up a buyer, avoiding a visit from the Feds, or maybe the Mossad, et cetera) outweighs any potential value that the uranium might have for me.



Same with Oil, it actually contains energy so it can "do" things that say water or Cows can't hence it has a value. it's value can go up or down based on the market but since it is a nessessity it will always have some value. Even dirt and water are sold in the market place because they have "real" value not "perceived" value.



How many NYC residents buy dirt? That's right, because there is little percieved value in buying topsoil while in the big city.

But, since you seem so intent on being wrong, what is the 'value' of:

A kilogram of U-235.

A barrel of oil.

How do you express their value without using currency? This should be good, as long as you remember this is in regards to economics, not philosophy.
Link Posted: 9/17/2005 9:34:19 AM EDT

Originally Posted By t-stox:
Did you guys get an F in economics 101 or what? I want to address this "idea" that things have value because people "belive" they do. your kidding right? Never heard something so foolish in my life. Things have value because people need them not because they think they need them. Your confusing currency which is basically worthless as a "good" or "resource" with real things that money can be exchanged for. For example if i have 20 pounds of Uranium-235 it has REAL value. it can be used "to do" something. The Iranians who want to buy it from me dont make it valuable just because they "belive" it. It can do something that chickens or copper wire can't. Same with Oil, it actually contains energy so it can "do" things that say water or Cows can't hence it has a value. it's value can go up or down based on the market but since it is a nessessity it will always have some value. Even dirt and water are sold in the market place because they have "real" value not "perceived" value.



What value do you think Gold has? Especially in the middle ages when it was the primary medium of exchange. Money is nothing more than an agreed medium of exchange. You go to work and produce things of real value, but you cannot immediately trade that value for things you need. Therefore, you are paid in money which is an agreed medium to calculate how much value you have produced. As long as everyone agrees on the medium, it works.
Link Posted: 9/17/2005 9:39:52 AM EDT
[Last Edit: 9/17/2005 10:25:16 AM EDT by kill-9]
Tomislav, you seem like an intelligent guy. So why are you so abrasive? At least in my threads, can you please be civil?
Link Posted: 9/17/2005 10:03:05 AM EDT

Originally Posted By Tomislav:

Originally Posted By OFFascist:
Paper money is inherintly worthless.

Its only worth what people think its worth.

As long as people think our money is worth something it will be worth something.

So in other words you better hope people dont stop believing.



Ya, and gold has some magic value that is fixed by the powers above, huh?

Nothing has value past what other people believe it has.



Very true. Gold really doesn't have much inherent value, unless you need it for its electrical conduction properties. Consumer confidence is everything. When people stop believing that paper money is worth something, maybe ammo will be the new currency. But I sure wouldn't want to be around when that happens...
Link Posted: 9/17/2005 10:24:05 AM EDT

Originally Posted By ASUsax:
Ross is correct, for the most part.

However, our problem is not the National Debt, but the Nat'l DEFICIT.

We can't continue to spend, year in and year out, more than we bring in. Fundamentally, we need to cut back, and balance the budget. It's not that the current level of either the debt or the deficit is that big a deal, it's that if we don't cut back, and congress continues to spend the way they are, we eventually will be in a problem.

It's absolutely true that it's no big deal now. But it's kinda like social security - we're paying the bills NOW, but we need to control it so that we can pay the bills down the road.

Very true...the DEFICIT is what we need to be concerned with. Debt is not necessarily a bad thing, but too much debt is a bad thing, especially when your debt increases each year with no end in sight. The deficit is what everyone should be concerned with.

One idea I've heard is that we need to tie the tax rate to the GDP/GNP. If we produce less, Fed.gov takes in less taxes. If we produce more, we pay more...basically it is a way to FORCE fed.gov to grow the economy wisely. If the economy doesn't grow, .gov starves.
Link Posted: 9/17/2005 10:24:46 AM EDT
You guys are right, as far as you go, about gold.

Golds utility as money isn't based on any "inherent value"

The inherent value of gold is its utility as money.

The problem with fiat isn't that it's worthless, it's that it's a debt instrument, loaned into existence at interest, backed by the force of government legal tender laws.

In effect, we have debt instruments as legal tender in payment of all public and private debts, loaned into existence by the Fed at interest rates fixed by providing as much debt as necessary to meet demand at that rate.

There is no free market capitalism without a free market for capital, this is the underlying problem with nearly all political philosophy in the US, the source of big government power and the reason we have a fascist/socialist two party political system.

The result of this debt-based monetary system is a situation where debt cannot be repaid. When debt inflation stops the money supply begins to contract. This is why there's always at least some inflation, and always a continuously accelerating exponential increase in total indebtedness in a fiat system. If there were deflation in terms of debt, or even equilibrium for any significant period of time, we'd have a deflationary depression.

Total indebtedness/GDP is higher than it's ever been before, made possible by interest rates below the true rate of inflation, which breeds accelerating inflation or currency weakness, which means commodities cost more in dollar terms, especially the ones we import a lot of like oil. As for when the housing bubble bursts, if interest rates rise above the inflation rate it'll pop like a balloon, it's a credit -driven market.

It's a liquidity trap so big it's hard to see.
Link Posted: 9/17/2005 11:12:25 AM EDT

Originally Posted By kill-9:

Originally Posted By Ross:
There is a housing bubble and that will burst sometime.



Y'know, I keep hearing about this "housing bubble", so I've been putting off buying a house. Any guesses as to when this is going to happen?



The "bubble" works kinda like this: Investors took a beating in the various crashes (like the dot.com crash) and looked for a place to invest their money. Many went after real estate. Afterall it's a pretty safe investment, and it was going up in many places due to the economy and low intrest rates. Think of the infomercials on "how to get rich quick by flipping properties using the John Smith method!" type stuff. Everyone was getting rich on property that they were just "flipping" (buying then selling), so more jumped on, which fueled the fire more, and so on. The low interest rates of recent times added alot of people that couldn't afford houses otherwise, and allowed many to refinance and take out some of thier equity as well, resulting in the same or lower house payment, but actually owing more to the bank.

So alot of people have been buying, selling, or both. That brought the price up because people think, "well, you can't go wrong buying a house here". In the end it's an artificial price that eventually market forces will cause to even out. Hence the "bubble". When it pops, the market prices will return to normal. Think of "assault weapons" right after the AWB. People buying and selling AR-15's for $4000, etc. Then think of the same market the day after the AWB sunsetted. Most people selling AR's for decent prices, and a few stuck with trying to peddle them off for way more than they were now worth. That's an example of a "bubble", only we just don't know the "sunset date" for housing.

I wouldn't worry about any housing bubble if I were buying my house today. The reason is I own only one house, and my intention is to live in it for a very long time. I bought it for the conventional reason that I was buying a "home" and not purely an investment. I don't see stock or profit when I drive up in the driveway. I see my home, and regardless of the housing market I don't see much reason to sell. Obviously, it is an investment any way you look at it, so some care in choosing must be taken, but I'm not a complete idiot when it comes to that, so I chose carefully. If we go back to the AWB example, I didn't just jump on the $4K AR figuring I can get another $200 out of it if I sold it in a month. I shopped around and found the $650 AR that I was going to keep because I wanted an AR, not the $200 profit.

Housing, like any investment, should be framed by, "It's not how you sell, it's how you buy."

There's good reasons to not put off buying a "home" now. Intrest rates are low now, and they will likely continue to rise. It seems that's the track the FED is on. So you'll save over the life of your mortgage if you buy now, rather than later. If you're in an apartment, and you're looking at a house payment that's in the same price range as your rent, or even more if you figure in the tax breaks a house gives you, there's no real good reason to stay in an apartment. It's not like rent is going to come down just because house prices might. Generally speaking, there's never a bad time to buy a "home". There's bad "houses" to buy (just like the $4K AR), so more care should be taken in today's market, but being careful is always a good plan.

Get a good real estate agent and pummel him with questions about the market and everthing you can think of. An expert will be able to answer them correctly, and you should be able to sniff BS even if you don't know the real skinny. They'll also know what your local market is doing. There will still be local markets that will be going strong during and after a burst.

In the end I think whether you wait for the bubble to burst or not depends on if you are buying a "home" or a "house". Just remember, "It's how you BUY" that counts.
Link Posted: 9/17/2005 11:17:48 AM EDT

Originally Posted By K2QB3:
You guys are right, as far as you go, about gold.

Golds utility as money isn't based on any "inherent value"

The inherent value of gold is its utility as money.

The problem with fiat isn't that it's worthless, it's that it's a debt instrument, loaned into existence at interest, backed by the force of government legal tender laws.

In effect, we have debt instruments as legal tender in payment of all public and private debts, loaned into existence by the Fed at interest rates fixed by providing as much debt as necessary to meet demand at that rate.

There is no free market capitalism without a free market for capital, this is the underlying problem with nearly all political philosophy in the US, the source of big government power and the reason we have a fascist/socialist two party political system.

The result of this debt-based monetary system is a situation where debt cannot be repaid. When debt inflation stops the money supply begins to contract. This is why there's always at least some inflation, and always a continuously accelerating exponential increase in total indebtedness in a fiat system. If there were deflation in terms of debt, or even equilibrium for any significant period of time, we'd have a deflationary depression.

Total indebtedness/GDP is higher than it's ever been before, made possible by interest rates below the true rate of inflation, which breeds accelerating inflation or currency weakness, which means commodities cost more in dollar terms, especially the ones we import a lot of like oil. As for when the housing bubble bursts, if interest rates rise above the inflation rate it'll pop like a balloon, it's a credit -driven market.

It's a liquidity trap so big it's hard to see.



The Commercial Credit System
Link Posted: 9/17/2005 11:29:41 AM EDT
To paraphrase Getty: If you owe the bank $100,000, you have a problem. If you owe the bank a $100,000,000, the bank has a problem.
Link Posted: 9/17/2005 11:32:43 AM EDT
It seems pretty obvious to me that if we started paying down the debt, we'd have more money to spend (due to less cost from interest).

Unfortunately, congress doesn't work that way. If the defecit is predicted at 20 billion this year and ends up only being 15 billion, they'll look at that like a 5 billion SURPLUS and proceed to increase spending by 10 billion.
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