   An article on debt
  Of course, while browsing through Yahoo I came across an article named How the Rich Get Richer. I'm thinking I'll find out new ways to save my money. Instead I find a critique of GM and the US Government. I found this extremely amusing:Quote: Yahoo!(paraphrase) From 1789 to 2000 (GW to Bill Clinton) the US Government borrowed $1.01 trillion from foreign investors. The Bush White House borrowed $1.05 trillion from 2000 to 2006So regardless of who the President is, how does the US Government get away from borrowing to survive? It seems if Americans are addicted to oil, then the Government is addicting to borrowing (until land bleeds red). I know all countries have debt and countries borrow from each other all the time. But when will this country be able to pay back its debt? Will the crutch of loans come back to seriously bite us in the ass or will our economy makes us dwindle to second world power (as far as trade and economy goes)?   
Because the debt is tiny;  so because on paper we make more than we have in debt, we shouldn't be worried about it? this is the same debt that China buys from us and causes our inflation (we can argue all day about whether inflation will ever go away, but the fact is that debt makes inflation). does not less debt == stronger economy even during a recession (or at the least makes the recession less stinging)? i'm not an economist obviously i have more questions than statements.   ;  From the economics I took in college (and from what I remember from it), it's actually excessive government spending when we're not in a recession that causes inflation.  The basic idea is that the government ups its spending during recession when the business community is unwilling to spend as much (thus bringing debt), and when we're pulling out of the recession and business is spending again, the government should cut back its spending and use the surplus to pay on the debt incurred by the recession spending.   ;  Yes, we should worry.  If we are not careful, perhaps we will hit a point where we are truly in trouble.  My point is that there is a lot of media noise around the topic -- and that is all it is: noise.  We aren't in as far over our heads as some people would like us to believe.  Do I agree with all the spending?  Absolutely not, but I have not yet started hiding my money under my matress either.   ;  It's surprising the US government can borrow so much. I remember reading somewhere that China holds a very large amount of sway over the US government due to all of the bonds that it's been purchasing to fund the US.   ;Quote:Original post by InstruoFrom the economics I took in college (and from what I remember from it), it's actually excessive government spending when we're not in a recession that causes inflation.  The basic idea is that the government ups its spending during recession when the business community is unwilling to spend as much (thus bringing debt), and when we're pulling out of the recession and business is spending again, the government should cut back its spending and use the surplus to pay on the debt incurred by the recession spending.well we are (or were?) in a recession and still overspending. i guess that's makes the immediate situation twice as bad. silly question but, when the government has a surplus is it supposed to start paying off other debt? if yes, then in what order? (i mean like budget debt, DC debt, then national debt. or national debt, departmental debt, and payoffs);  Few people are upset at the national debt per se. It's more likely they're ticked off at the opportunity cost: spending money on a war when it could be used to fund, say, education or NSF grants.   ;Quote:Original post by Alpha_ProgDesQuote:Original post by InstruoFrom the economics I took in college (and from what I remember from it), it's actually excessive government spending when we're not in a recession that causes inflation.  The basic idea is that the government ups its spending during recession when the business community is unwilling to spend as much (thus bringing debt), and when we're pulling out of the recession and business is spending again, the government should cut back its spending and use the surplus to pay on the debt incurred by the recession spending.well we are (or were?) in a recession and still overspending. i guess that's makes the immediate situation twice as bad. silly question but, when the government has a surplus is it supposed to start paying off other debt? if yes, then in what order? (i mean like budget debt, DC debt, then national debt. or national debt, departmental debt, and payoffs)Are/were we in recession?  Some poster a while ago mentioned a recession needing to last several (I do not recall) quarters, and that we did not meet that criteria.  I am not saying I know, but it is a question that should be asked.As far as paying off debts, most economists believe it should be done slowly.  If it is done too quickly, it can cause a quick decrease in the money supply, and rapid deflation, which can cause nasty things like depressions.   ;Quote:Original post by WitchcravenAre/were we in recession?  Some poster a while ago mentioned a recession needing to last several (I do not recall) quarters, and that we did not meet that criteria.  I am not saying I know, but it is a question that should be asked.Well I remember it was hard as hell to find a job between 2001 and 2002. And every money/financial analyst was saying a we were in a recession. But what the hell do i know?Quote:As far as paying off debts, most economists believe it should be done slowly.  If it is done too quickly, it can cause a quick decrease in the money supply, and rapid deflation, which can cause nasty things like depressions.Ok, interesting. I must have how these things work completely backwards. Here's my thought process, correct where necessary. Inflation is due to the printing of more money therefore the decreasing the actual value of the dollars which is also affected by debt. Now if you pay the debt off, say rather quickly, then the value of the dollar rises and also you have all these dollars printed out. Therefore there's no real decrease in money supply. Because there's more currency in circulation, more people have dollars (simplistic, i know). Now the Government will for a time stop printing more money. But that's only because the dollar is worth more. Therefore now with your dollar instead of buying just a can of soda you can 4 can of sodas, and 20 pieces of bubble gum (think 1985). So I'm maybe my idea of what should happen is too rosy, but i think the logic is right.