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Originally Posted by Darth Ape
nothing wrong with debt if it's funding growth. AS far as I can tell, the US is far outgrowing all of its western rivals...
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not ireland, finland, sweden, greece or spain. the us is at 143 in the list for 2006, with a 3.3% growth. eu is at 2.9%, not "far outgrowing" by any means.
the problem with saying "nothing wrong with debt" is the comment may be valid on a short term basis, but to have continually increasing debt on a long term basis (such as the past 7 years straight) there eventually comes a time when the debt burden takes too much of the revenues, making it very, very difficult to retire any of the debt.
for instance, the debt service on the $5.1 TRILLION in public debt totaled over $406 BILLION in 2006. that is just the debt service, that does nothing to retire any of the debt.
say that a few times....over $400 Billion a year goes to paying the interest, and the majority of that goes outside the country.
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thanks mostly to Bush's tax policy. Another good point to make is that the US's debt ratio is still far lower than that of almost all European nations.
Take a look at the stability of government t-bills. Apparently the investment community still views the US government as the most secure of all investments. Nobody thinks the government will default on it's loans.
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the usa has public debt that equates to about 65% of its annual gdp, right there with france, germany and canada, and higher than almost all of the eu economies except for italy, greece and belgium.
nobody is in any way suggesting that the us government is going to default on its debt, it's ridiculous to even mention it.
look at the yield advatage on our debt, it is now gone. historically we had a positive yield advantage.
looked at our currency? we're at historic lows vs the pound and the euro, even the candian dollar is almost on par.
the candian dollar worth as much as the american dollar? yikes.
we MUST get our federal budget back into balance. the amount of debt rung up by the current administration will be its second worse legacy behind its foreign policy mistakes, both of which will place a very heavy burden for all of us going forward.