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when national debt goes down , private debt goes up. Private debt is the issue. The federal government has no issue paying debts because those debts are dollar
by mempko 8y ago
when national debt goes down , private debt goes up. Private debt is the issue. The federal government has no issue paying debts because those debts are dollar denominated. The private sector on the other hand can't. Government debt is not the same as household debt, unless of course the household can print their own money. Image you are the Joe family and all your debt is denominated in Joe dollars, do you anticipate you will have a problem paying that debt?
Reducing government debt will result in bad times for the private sector. Ever wonder why Clinton's surplus resulted in large private sector debt and then a crash? This is why.
- merpnderp 8y agoI see this argument all the time and I don't understand how people don't see the flaw. The government can't just print dollars to service their debt without devaluing the dollar. If they devalue the dollar they'll make a lot of people upset and get their butts voted out of office. There is obviously some lee-way, but there is a tight upper limit on printing their way out of debt.
- tabtab 8y agoRe: "when national debt goes down, private debt goes up." - Why would that be the case?