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Why pay off debt? First, it seems like the honorable thing to do. Honor? Right thing to do? In the US? I guess we lost that a long time ago. If money that is s
by bprater 18y ago
Why pay off debt? First, it seems like the honorable thing to do. Honor? Right thing to do? In the US? I guess we lost that a long time ago.
If money that is servicing debt were freed up, wouldn't it be logical that it could flow to other useful places?
- jwilliams 18y agoFirst, it seems like the honorable thing to do. Paying off debt and defaulting on debt are two different concepts. Most companies are permanently in debt in some fashion.
- Xichekolas 18y agoWell the idea of borrowing is that you use the money in useful ways (yeah, I know that is debatable with the government). It'd be splendid if we could pay for everything out of cashflow (tax receipts), but things like wars and economic crises come along and require borrowing in big lumps. You could ask the same thing of any borrower... "wouldn't all that money spent servicing your mortgage or bond issue be better used elsewhere?" ... to which they would reply: "but that mortgage bought me a house, that bond issue allowed us to expand overseas". As for honorable, that is just misleading. The people loaning money to the government aren't victims, they are earning interest on a (virtually) risk-free investment. The national debt is not an expropriation of private capital... T-bills are offered for sale and buyers agree to their terms voluntarily.