Basic accounting observes the dual-entry nature of debt. It's also an asset.
These anti-debt Jeremiahs would be more persuasive if they also asked: "Are the assets good?"
Maybe not! That could be a good argument. And the debt-Jeremiahs may be right.
But the argument is never made. The asset-liability duality is never acknowledged. The debt-Jeremiahs simply don't even acknowledge debt's dual-entry nature.
Would this work for a publicly held corporation? No. Of course not. The debt critics always say "The govermint isn't abiding by the laws of economics that every household has to obey." OK, then look at the govt as if it were a company. It runs a negative cash flow, it sells bonds, it's always raising money. Sounds bad right?
maybe.
But hello . . over there . . . they're called utilities. They do that! Everybody loves electricity and natural gas. The assets are good. But they're running constant cash flow deficits because they're building huge and expensive infrastructure that everybody wants.
Medicare, Medicaid . . . are these assets that society values? And yes, we owe most of the interest to ourselves. You can verify that on the Treasury website, the holders of the debt. It's not just fat cats. It's bond funds, mutual funds, reitrement plans, even other govt agencies. It's not a doge (no pun intended) to say we owe it to ourselves.
Does that mean it's good debt and good assets? No. The debt Jeremiahs may be right. But they never say why they're right. they just tell you they're right. Would you believe some market pundit who tells you he or she is right, and doesn't tell you why and doesn't even discuss half of the issue? Of course not.
I am NOT SAYING they are wrong. They may be right. But they should expand their reasoning.
It's not a question of the amount of the debt itself - it's a question of the amount of interest paid to "service" the debt. The amount of debt at any particular time is "sunk cost" and for the foreseeable future we can expect that there will be those willing to purchase the debt either when it is issued to fund deficits to when it matures and is "rolled over". The key issue is - at what interest rate - because that's going to be "current spending that has to be funded NOW - either out of current savings or by "fiat". The ongoing collapse of the value of the $ vis-a-vis gold (currently requiring more than 2850 where it once took 35 - or even only 20 and a fraction to purchase an ounce - indicates that the financial system is collapsing under the funding costs of the accumulated and anticipated debts. THAT'S THE PROBLEM.
The government takes money out of paychecks for SS and Medicare. How are these looked at as part of a deficit? Isn't the government charging itself interest but they print $$?
We have to bring manufacturing back to turn this around and the Beltway crowd politiks this instead of uniting for the common good.
We need more choices in political parties that comprehend the deficit.
Basic accounting observes the dual-entry nature of debt. It's also an asset.
These anti-debt Jeremiahs would be more persuasive if they also asked: "Are the assets good?"
Maybe not! That could be a good argument. And the debt-Jeremiahs may be right.
But the argument is never made. The asset-liability duality is never acknowledged. The debt-Jeremiahs simply don't even acknowledge debt's dual-entry nature.
Would this work for a publicly held corporation? No. Of course not. The debt critics always say "The govermint isn't abiding by the laws of economics that every household has to obey." OK, then look at the govt as if it were a company. It runs a negative cash flow, it sells bonds, it's always raising money. Sounds bad right?
maybe.
But hello . . over there . . . they're called utilities. They do that! Everybody loves electricity and natural gas. The assets are good. But they're running constant cash flow deficits because they're building huge and expensive infrastructure that everybody wants.
Medicare, Medicaid . . . are these assets that society values? And yes, we owe most of the interest to ourselves. You can verify that on the Treasury website, the holders of the debt. It's not just fat cats. It's bond funds, mutual funds, reitrement plans, even other govt agencies. It's not a doge (no pun intended) to say we owe it to ourselves.
Does that mean it's good debt and good assets? No. The debt Jeremiahs may be right. But they never say why they're right. they just tell you they're right. Would you believe some market pundit who tells you he or she is right, and doesn't tell you why and doesn't even discuss half of the issue? Of course not.
I am NOT SAYING they are wrong. They may be right. But they should expand their reasoning.
It's not a question of the amount of the debt itself - it's a question of the amount of interest paid to "service" the debt. The amount of debt at any particular time is "sunk cost" and for the foreseeable future we can expect that there will be those willing to purchase the debt either when it is issued to fund deficits to when it matures and is "rolled over". The key issue is - at what interest rate - because that's going to be "current spending that has to be funded NOW - either out of current savings or by "fiat". The ongoing collapse of the value of the $ vis-a-vis gold (currently requiring more than 2850 where it once took 35 - or even only 20 and a fraction to purchase an ounce - indicates that the financial system is collapsing under the funding costs of the accumulated and anticipated debts. THAT'S THE PROBLEM.
The government takes money out of paychecks for SS and Medicare. How are these looked at as part of a deficit? Isn't the government charging itself interest but they print $$?
We have to bring manufacturing back to turn this around and the Beltway crowd politiks this instead of uniting for the common good.
We need more choices in political parties that comprehend the deficit.