Deficit Spending- Which side are you on?

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Luna Gryllus

Mountain climber
Shanksville
Topic Author's Original Post - Nov 16, 2012 - 04:11pm PT
Is the plan to never pay off our National debt? I feel there are two views on deficit spending and a National Debt (or three, if you include those ignorant to the fact there is a debt):

One view is that deficit spending is a way for the government to stimulate the economy during economic downturns. Meaning they believe the role of government is to provide services to the public, that the private sector wont, but to also stimulate the economy during a crisis (similar to the Economic Stimulus Act of 2008, where $300 was sent to 130million individual taxpayers to go spend). This view feels that during an economic Boom (a Bubble), a budget surplus should be used to pay down the debt at that time. Bill Clinton's Presidency lasted the era of the Dot-Com Bubble (1995-2000). In 2000, the government had a surplus of approximately $200 Billion, however a National Debt of $5.7Trillion. So $200 Billion in a Surplus, could have payed the budget down by 3.5%. Would you say paying off $35 of a $1000 debt is much of an accomplishment? I guess its something... However we are not even paying down the national debt balance, just paying % on the debt. So lets assume 2013 we have a another $200Billion surplus to apply to the now $16trillion debt? Without accruing interest, that would take 80 consecutive years ($200B/yr) to pay off the national debt. Do you actually believe that we will have a surplus next year or even within the next decade with increased government spending?

The other side of the coin, is that some consider deficit spending to have an adverse affect on the government and the economy. This side feels that a deficit would shift the burden of debt to future generations, as debt eventually has to be paid.

I believe in the latter. As those who feel debt is a good thing and then hedge that another boom will happen and we can then pay down the debt more rapidly. To me that is beyond insane. So if viewed as an individual handling their personal finances this way, would infer that they know that good times are sure to come in the future, so go ahead and spend now, even if you don't have the money to. Why not use the saying, “save for a rainy day”!?! As an individual Tax-Payer, you and I cant spend more than we have, unless more debt is taken on in the form credit or a loan. Most would find that in this situation that borrowing further into a debt results in nothing positive (in the long term). Unless you have proper knowledge of how to borrow at a lower %rate and look for a higher rate of return through investing (which there is still a risk in doing this), borrowing in the end leads to nothing but more debt and less net wealth. We treat our government budgets as though it can be partially paid by a credit card and not a checking or savings account (Funds provided through Taxation). As if you dont have money in your checking account, you then have to defer to credit to pay the remaining deficit.

So which side are you on?

1. Continue Increased government spending, with the expectation that a boom will happen and then we can worry about paying down the debt.

2. Minimize (the role of) government through budget (department) cuts and be able to manage a federal Budget, using ONLY tax revenues and not borrowing more debt.

If you have a third view of why deficit spending is positive or negative, please share your viewpoint.

apogee

climber
Technically expert, safe belayer, can lead if easy
Nov 16, 2012 - 04:12pm PT
Credit: apogee
Jebus H Bomz

climber
Reno, Nuh VAAAA duh
Nov 16, 2012 - 04:16pm PT
Some more goldurn off topic post election whining!

God love 'em cuz I think they should be spit roasted through their anus.
Reilly

Mountain climber
The Other Monrovia- CA
Nov 16, 2012 - 04:17pm PT
as debt eventually has to be paid.

Not if you're Argentine, Spanish, Greek, Portuguese, etc. But I digress.
Even Germany indulges in deficit spending so it must be OK, right? Only an
idiot would deny the necessity of it to some extent and therein lies the rub.
Sometimes moderation is the most difficult path to follow.
Jolly Roger

Trad climber
here and there
Nov 16, 2012 - 04:27pm PT
Spend baby. Break the bank and force all these lazy ass libs to fight for what they need. Swinging purses and all
Dave Kos

Trad climber
Temecula
Nov 16, 2012 - 04:29pm PT
It's all about ROI.

I'm certain that deleting this thread would yield more than 100000000000%
adikted

Boulder climber
Tahooooeeeee
Nov 16, 2012 - 04:41pm PT
Sweet another climbing thread "rolls eyes"
Jolly Roger

Trad climber
here and there
Nov 16, 2012 - 04:48pm PT
When everything crumbles, and the law cracks down you think you will be climbing.


Climbing is freedom! And it's slipping. I enjoy climbing but what Luna touches on is very important and worth discusion. More so than anything Apogee or Dr. F ever bring to the tables.


Kudos Luna for bringing a tough topic that effects us all to the table.


The problem here is no one cares. Obama is in!
Bruce Morris

Social climber
Belmont, California
Nov 16, 2012 - 04:52pm PT
Depends on whether you're a follower of John Maynard Keynes or Milton Freidman. The Keynesians vs. the Neo-Liberals. A little bit of this, and little bit of that! Whatever suits you at the time.
Luna Gryllus

Mountain climber
Shanksville
Topic Author's Reply - Nov 16, 2012 - 04:56pm PT

Not if you're Argentine, Spanish, Greek, Portuguese, etc. But I digress.
Even Germany indulges in deficit spending so it must be OK, right?

So your response is to act like the countries you mentioned above and hopefully having S&P /Mooodys reduce the US Credit rating? Wow! you are a fu**in moron. So you believe that having our credit rating reduced will help pay off the national debt? That's your logic and explanation as to why you believe in deficit spending? Or do you just suppress the fact that is how we can cover our current federal budget, through deficit spending? Good job and good luck in life-
moosedrool

Trad climber
lost, far away from Poland
Nov 16, 2012 - 05:07pm PT
Is that you, LEB? Welcome back! Sorry, I meant, GO BACK UNDER YOUR ROCK!
Mighty Hiker

climber
Vancouver, B.C.
Nov 16, 2012 - 05:08pm PT
Luna Gryllus or Luna Tic?
moosedrool

Trad climber
lost, far away from Poland
Nov 16, 2012 - 05:10pm PT
Definitely -Tic!
Reilly

Mountain climber
The Other Monrovia- CA
Nov 16, 2012 - 05:13pm PT
Luna's interpretation of my response indicates either extremely poor reading
comprehension, at the very least, or full-blown Lunacy. But, to be fair,
I must admit I am rather simple-minded not to realize it is an either/or
proposition.
moosedrool

Trad climber
lost, far away from Poland
Nov 16, 2012 - 05:15pm PT
Luna: "The craziest route I have ever climbed was 'Fantasia' in Fisher Towers (Moab). 5.10 (8 pitches). I will admit I had to hang several times, but what an amazing place!!!”

Would be nice to see some pictures...
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