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Post by johnsmith on Oct 6, 2022 21:43:47 GMT
Rome's example doesn't work because the romans used gold/silver (they couldn't mint unlimited amount of gold/silver). US can print as much USD as they want, so there is no way the US Govt can default on it's debt. It may cause inflation, it can't default. If U.S. wants to default, it could. Not recommended, but possible.
I agree - that would be a political decision, not one they have to. Of course it will cause massive turmoil in the financial markets, I look forward to that as I am accumulating and would love to buy assets at cheaper prices.
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Post by ECE Prof on Oct 6, 2022 21:59:53 GMT
As long as there is a real GDP growth with expanding economic activities and a good possibility of paying back at the interest (and possibly some debt), there is nothing wrong with debt. We all borrowed to buy a home and paid back, say, over 30 years, it is fine. But, with no real GDP growth, if a country keeps on going with deficit spending for decades, it could spell trouble in the future. The basket case is UK now with high inflation and high interest rate, there is no money in the kitty. When the pot is empty, how do they buy food to survive?
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Post by Capital on Oct 6, 2022 22:03:13 GMT
Just a bit of food for thought == Argentina has their own currency; however, that has not kept them from defaulting on their national debt multiple times.
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Post by Chahta on Oct 6, 2022 23:49:34 GMT
As long as there is a real GDP growth with expanding economic activities and a good possibility of paying back at the interest (and possibly some debt), there is nothing wrong with debt. We all borrowed to buy a home and paid back, say, over 30 years, it is fine. But, with no real GDP growth, if a country keeps on going with deficit spending for decades, it could spell trouble in the future. The basket case is UK now with high inflation and high interest rate, there is no money in the kitty. When the pot is empty, how do they buy food to survive?
The only thing wrong is it never goes down. It is kinda like a leveraged fund. It works until one day it doesn't. |
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Post by ECE Prof on Oct 6, 2022 23:57:06 GMT
As long as there is a real GDP growth with expanding economic activities and a good possibility of paying back at the interest (and possibly some debt), there is nothing wrong with debt. We all borrowed to buy a home and paid back, say, over 30 years, it is fine. But, with no real GDP growth, if a country keeps on going with deficit spending for decades, it could spell trouble in the future. The basket case is UK now with high inflation and high interest rate, there is no money in the kitty. When the pot is empty, how do they buy food to survive?
The only thing wrong is it never goes down. It is kinda like a leveraged fund. It works until one day it doesn't. I know. That has been the case since my son was just one-year-old baby. His baby picture from Montreal, CA is on my desktop, and I see his old picture every time, I close a program and switch to something else. He turned 48 two days ago. |
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Post by johnsmith on Oct 6, 2022 23:59:31 GMT
Just a bit of food for thought == Argentina has their own currency; however, that has not kept them from defaulting on their national debt multiple times. Their debt was dollar based, not peso. |
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Post by johnsmith on Oct 7, 2022 0:05:52 GMT
The basket case is UK now with high inflation and high interest rate, there is no money in the kitty. When the pot is empty, how do they buy food to survive? ---------------- When the pound was strong, low inflation, UK still had rationing. en.wikipedia.org/wiki/Rationing_in_the_United_Kingdomso had nothing to do with "pot empty - how do you buy food". That's a canard! |
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Post by Capital on Oct 7, 2022 9:48:25 GMT
Just a bit of food for thought == Argentina has their own currency; however, that has not kept them from defaulting on their national debt multiple times. Their debt was dollar based, not peso. Ahh that makes sense. I don't even want to own their currency much less their debt. |
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