As a private citizen, it's my goal to have no debt, and savings in excess of my future debts.
Can someone explain why it's good to have a global economic system that is at great risk if the United States gets rid of it's debt?
Can someone explain why it's good to have a global economic system that is at great risk if the United States gets rid of it's debt?
Some questions: Would it be bad for a person to be debt free? A household? A neighborhood? A small company? A large company? A city? A state? A small country? A large country?
Why is it good for companies and people to be debt-free, but bad for countries?
Another way to look at it is that it's not just government debt that's important; there have to be some people who owe other people money or the economy doesn't function. The normal process of business institution-building is founded on the idea of loaning money (again, we usually call this "investment," but it's debt at its base). A good way to think about it is that if you are debt free, that's good for you, but if everyone were debt free, we'd still be living in an incredibly primitive economy.
A great example is buying a house. If you have the cash for the house that's great, but do you want want to tie up that much money into a single asset especially when the cost of money is so low right now? Other investments might not be that great today, but over the next 15 or 30 years you can probably find an investment that beats the current low rates of 3.75% or below.
When you buy a house on credit now, you're spending newly created money. You're purchasing a large asset at current prices (which are set by the current money supply.) As the new money you've injected into the economy circulates, prices rise. But you had the advantage of buying before you injected the new money.
If money were not continually being created, eg if it were backed by gold, then prices would drop over time, because the rate of innovation and productivity gains is greater than the rate of new production of gold. In this scenario, houses should depreciate over time.
With businesses, investing borrowed money can help the company grow, and give returns greater than the interest on the debt.
With countries, the theory goes, a little debt means other countries have a vested interest in your success or failure. For example, why hasn't China invaded the USA yet? Perhaps they are waiting until they get their ~$4T back! :)
Well for starters, the Chinese don't seem to really be in the business of invading countries on the opposite side of the world, do they? Unlike another little country I can think of...
theoretically it is fairly easy to repay those $4T. you would need some large container ship to transport all of them back to China, but a lot of those go back over Pacific fairly empty anyway.
Many crazies advocate abolishing the Fed as they see it enslaving and controlling the entire economy without much supervision and control by the citizens of this country. Not saying they are completely right or anything, but it this is basically a warning or a symptom that something is perhaps fundamentally wrong (I sure don't know well enough how it works, it is just a feeling).
Think of it as what would the drug companies do if all of the sudden there were cheap easy un-patent-able cures for all the chronic diseases. Would they start selling herbal supplements? Go into homeopathy business? Would they invent more 'restless leg syndromes' type diseases. I think it is a bit like that. It shows perhaps there is something wrong with the system & the constraints and incentive are not working they way we'd expect.
Whether it was either just enough to stop them from getting to the deeper, restorative levels of sleep, or bad enough that they had to get out of bed and walk around for a couple of hours, restless leg syndrome is a clear blight on quality of life. Sure, it may not be fatal (except where increased tiredness is generally), but it's still a significant health issue to be afflicted by.
Also wouldn't you working in a sleep clinic skew your perspective on how widespread the thing is? In other words you would only see people who have problems sleeping.
Also, I didn't say anything about how widespread it was - I said it fucked people up and it's not a pseudodisease.
It's not to say that there aren't overprescription issues, just don't fall into the Prozac trap - just because something's overprescribed doesn't mean there isn't a real disease around.
It doesn't mean Merck doesn't have a drug that lowers the threshold, but it also doesn't mean that all cases are due to this Merck drug.
Anecdotally, RLS has been around for quite a long time, but again, I don't know the timeframe of the drug you refer to.
> Many non-crazies [...] One of them is running for
> President.
Also, Cantillon effects messing up the economy, putting more wealth in the hands of banking elite, growing the size of government, etc... are other problems made possible by central banking.
The banking industry makes money when it issues loans. So it's very important that people keep borrowing. To keep people borrowing from the banks and not from each other or private savings, the banks are allowed to create money and lend it at below-market rates. So in general, it's always a better deal for a borrower to borrow from a bank than from private savings.
The current system is great for bankers, great for government (who can essentially get all the money it wants from the bankers), and great for borrowers. It's bad for people who don't borrow, especially savers.
the government lives forever.
https://fbcdn-sphotos-a.akamaihd.net/hphotos-ak-ash4/318450_...
But in the case of US debt, the opposite seems to be true: http://4.bp.blogspot.com/-iFxt2vNk2y0/TZNxgTINNEI/AAAAAAAAAW...
When Moody's downgraded the US credit rating, the response was a rush to, not a flight from government bonds.