Well, it might get in the way of economic activity mostly in my capitalist Utopia where I and many others can drive economic activity by having customers who can afford to pay for shit.
When households can't spend, there's little demand, when there's little demand, economic activity goes down. Hmmm... I wonder if we could look for evidence of that. Say, if the woefully inadequate stimulus bill (which was mostly tax cuts) were to end, what would happen to the GDP numbers.... oh... looky here, the number crashed.
If households can't spend and the if the government can't spend, then the economy will contract. It's not all that complex.
If I'm running a business.... oh, and I am. I borrow money to expand - in fact the deal I'm doing at the moment is many many many many many MANY multiples of the current income of the business. And, believe me, the terms on the table are not as attractive as those available to the US government. Without debt and without expanding that debt, I can't get new product developed.
The US government is, in that regard, JUST like a business, and a business dealing with a really really bad economic condition but who, fortunately for the shareholders (us) has bankers who understand what a great credit risk it is.
Oh, and getting rid of the tax cuts that represent 40% of the current debt would be a good start too.
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Date: 2011-08-01 05:35 pm (UTC)When households can't spend, there's little demand, when there's little demand, economic activity goes down. Hmmm... I wonder if we could look for evidence of that. Say, if the woefully inadequate stimulus bill (which was mostly tax cuts) were to end, what would happen to the GDP numbers.... oh... looky here, the number crashed.
If households can't spend and the if the government can't spend, then the economy will contract. It's not all that complex.
If I'm running a business.... oh, and I am. I borrow money to expand - in fact the deal I'm doing at the moment is many many many many many MANY multiples of the current income of the business. And, believe me, the terms on the table are not as attractive as those available to the US government. Without debt and without expanding that debt, I can't get new product developed.
The US government is, in that regard, JUST like a business, and a business dealing with a really really bad economic condition but who, fortunately for the shareholders (us) has bankers who understand what a great credit risk it is.
Oh, and getting rid of the tax cuts that represent 40% of the current debt would be a good start too.