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I've consulted to the IMF as a finance and economic consultant so I'll take that report as conjecture and not fact. Surely you can't rebuff my reasoning here.
by icu 11y ago
I've consulted to the IMF as a finance and economic consultant so I'll take that report as conjecture and not fact.
Surely you can't rebuff my reasoning here.
Governments control spending, and have a large part in what they earn (taxation, economic, monetary and fiscal policy).
If you spend more then you earn, and you spend too much, the debt repayment will overcome your ability to pay off your debt.
If you cut back and spend less than your means, and you use the net excess cash to pay off your debts (that can be paid down on a capital, and not interest only basis), then you can get back to a situation where you are out of debt and can spend more again.
I submit to you that Government spending works the same way.
What makes Government debt evil IMHO is that it is burden forced onto future generations to the advantage of the current one.
- the_why_of_y 11y agoThe old government = household fallacy. A government is fundamentally different from a household because its spending is a significant percentage of its own income. Every time a dollar originally spent by the government changes hands in the economy, taxes are paid. Also, debt always has 2 sides: it is a liability of the government, but an asset of the lender, who is very often a citizen of the same country and whose offspring will inherit the claims.