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There is no such thing as spending more than we had. The housing boom didn't consist of houses borrowed from a cosmic banker, whom we now have to pay. A nation

There is no such thing as spending more than we had. The housing boom didn't consist of houses borrowed from a cosmic banker, whom we now have to pay. A nation cannot spend anything it doesn't "have" except by trading with other nations, and trade does not remotely explain the deficit. As Friedman might say, monetary unsustainability is purely a monetary phenomenon. Even Keynesians know this and in fact that is why they tend to call for higher inflation.

dmritard96 14y ago
"The housing boom didn't consist of houses borrowed from a cosmic banker, whom we now have to pay. " We don't have to pay because people foreclosed and filed for bankruptcy protection. A nation cannot spend anything it doesn't "have" except by trading with other nations, and trade does not remotely explain the deficit. When did we start talking about the deficit and why are you suggesting the deficit is related to the economy collapsing/recovering (not saying it isn't)? To be fair, when I mentioned retirement savings I wasn't really thinking public programs, probably should have been more specific. I think many would agree that irresponsible loans were given to people that didn't have the means to pay them off, especially if (when) the adjustable rates adjusted. If housing prices don't get back to prerecession levels for instance - well I think thats a good thing. People where inflating the markets that they really had no business being in and banks gave them mortgages for these markets wearing a grin...