We are not "The Greeks, Italians, Portugese or the Irish". Folks are buying our debt cheap. When we sell bonds and tbills they are purchased. When the Europeans you mentioned do the same buyers wait for the interest rates to be raised. The Market is stating loud and clear that American debt is a good bet. Buyers can't get enough of it. It is only logical that we should be taking advantage of this FACT. Just as a business uses a bridge loan or prints paper to build a new factory.
Unemployment is what is wrong with our economy Not Debt.
But I agree with you that when the economy is strong and unemployment is low a balanced budget is very important. But when times are bad and unemployment is high Government debt built on washing money thru the economy is good.
That's one take. My take is Europe along with the entire developed world has made a huge social contract with their people starting in the 60's. Combinations of demographics and inflation have made these obligations unaffordable and these societies are going under because their economies aren't efficient enough and big enough to pay for their obligations.
The uncertainty in the world has given us a temporary reprieve on our debt because people are afraid to risk capital to create economic growth. They are essentially willing to buy US debt at negative real interest rates out of fear.
If you believe the world economy and the US is going to continue to languish and people are willing to go broke buying US debt for ever there is no reason not to shoot craps and borrow even more. If you believe that people will continue to innovate and strive to improve their basic living standard and eventually will be willing to take on more risk, US debt is very likely not going to be attractive unless it pays positive real interest rates. At that point our debt will crush us just as surely as Greek debt and Irish debt are crushing them.
If we were actually using debt to build our society infrastructure and get a real payback in terms of efficiency than maybe I could buy into this argument. What we are doing is using our debt to build a large public beauracracy that is crowding out private borrowing and employment. Essentially becoming much more like Greece and Spain.
The problem with democracy is real politics in our country isn't about building a more efficient and productive society that creates more wealth, it's about transfer payments to constituents. Highly inefficient. Companies are going to lay people off buy equitment that eliminates jobs, grow and hire, change. It's a fact of economic life.
Last edited by Winstonbiggs; 01-07-2012 at 09:36 AM.
So when a company is restructured and there are layoffs that are part of bringing that company to profitability, the only things that count are the layoffs and not the people who keep working in the profitable company?
If companies like Bain didn't buy and restructure companies, who long do you think all the employees would have jobs in an unprofitable company?
If you had skin cancer and the dermatologist removed some healty skin along with the cancer to make sure he got it all, would you accuse him of being a butcher because he removed skin and tissue so you could live?
As a JI Republican Circa 2007-2008 I can tell you that I had become disillusioned by Politicians that I had supported, that had promised smaller government and delivered the opposite. Stopped posting here for a while at that time.