Newsgroups: talk.politics.theory,talk.politics.misc,alt.fans.rush-limbaugh
From: kwee@oracle.uucp (Karl Wee)
Subject: Re: National debt is not bad
Reply-To: kwee@oracle.uucp (Karl Wee)
Organization: Oracle Corporation, Belmont, CA
Date: Sun, 24 Jan 1993 01:35:30 GMT
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From: thf2@ellis.uchicago.edu (Ted Frank)
>
>>But they have clear, credible plans of paying back the debt.  Does the US?
>
>Yes.  Not a single US debt holder has ever gone unpaid.

That's only HISTORY.  It tells little about the future as everything is
different.  If the US doesn't have a PLAN to repay even the interest, (if it
lets the debt grow exponentially) it's much worse off than the college
student or the home buyer.  Who's to say it won't default, repudiate, or
inflate away at least part of the debt?  The numbers are overwhelming.

For example, what happens when Baby Boomers start collecting social security?
Our dear "leaders" have been using the current surplus of SS (due to working
Baby Boomers) as regular
revenue to make the deficit look smaller.  This is IN ADDITION to the
already serious exponential growth of the debt.

>It would be even worse today, because the deficit is even more reliant

>>How about the fact that the national debt is growing at an exponential rate
>>much faster than economic growth?
>
>That could be a problem, but not necessarily so.  It was growing much
>faster from 1941 to 1945, for example....

Again, history is misleading.  After WW2, the US experienced phenominal
economic growth that grew us out of the debt.  Spending money on WW2 was
also justifiable.  No one but the govt could handle this task.  Now we're
spending money on current expenses with no end in sight since the
fundamentals of the world market has changed and US goods can no longer
dominate it and generate so much growth for the Us.

>If we always had a balanced budget, the US would have ceased to exist
>fifty years ago.

All proponents of balanced budgets agree that an exception should be made
for national emergencies.

>Speaking of negative feedback loops, that's just what helped along the
>Great Depression in a big way.  Government kept "balancing" the budget,
>which made revenues go down as the economy shrank, which led to more cuts,
>which ...

Again, things are completely different now.  The govt's fiscal status, for
example....  Compared to the Great Depression, the economy does NOT need
govt stimulus nearly as badly.  In fact, one of the possible paths we'll
go down if we DON'T balance the budget is an Even Greater Depression when
the govt decides to drastically cut spending and increase taxes to solve
its "new found" fiscal problem.  (Of course, the other paths are not that
much better either)

>It would be even worse today, because the deficit is even more reliant
>on the state of the economy because of transfer payments that do nothing
>to add growth.  

Please show me your reasoning in more detail.

>I think it's even more dangerous to exaggerate the problem of the debt,...

How have I exaggerated the problem of the debt?

>-- 
>ted frank                     | thf2@ellis.uchicago.edu 
>standard disclaimers          | void where prohibited
>the university of chicago law school, chicago, illinois 60637

- Karl Wee
Newsgroups: talk.politics.theory,talk.abortion