ROCK AND ROLL MASTER
- Jun 7, 2005
- Reaction score
- Political Leaning
That is true, but you also have to acknowledge that, at least for my entire lifetime we've been trillions of dollars in debt, so that level of debt is to be assumed.Iriemon said:You have to look at both the level of debt in conjunction with a defict. If there was no debt, a deficit for any given year is not necessarily terrible or even bad -- in a rescission there is an argument that tax cuts/additional spending helps the economy get back into gear.
However, if you have a large debt and a good economy, deficits are not helpful and just add to the debt burden. Ultimately, it is the debt that burdens the nation. The $325 interest expense in 2004 was not because of the deficit -- that was the interest the Govt had to pay because of its large debt. The fact that we are vulnerable to China and Japan is not because of a deficit in any given year, but because we owe those countries hundreds of billions because of continued deficits over a period of many years.
The fact is debt at a certain degree bogs down the economy due to interest payments, but the defecit is what hurts our currency. The fact is domestically the actual economic indicators aren't so bad, i.e. inflation low, relatively low unemployment, but the fact is with our defecit we are just falling deeper and deeper into the little hole we've dug for ourselves, and a good domestic economy doesn't mean all that much, considering our trade defecit.