Re: Is the national debt a good thing or a bad thing?
national debt is different than business debt.
the government spends the borrowed money on things that a business would never think of (welfare, military etc.). but, that spending has a very large value to the citizens of the country for which it is spent.
so long as the desire to hold claims on the future ability to tax and generate revenue remains high, the system will continue to work.
the problem eventually is that you need to keep issuing more debt to pay off the interest you owe on teh previous debt, thus our national debt has nearly doubled in 7 years (i think in 2000 it was like 5trillon? and now it 9trillion). obviously we've had some extenuating circumstances, but what happens when the sheer amount of the debt overtakes GDP? at some point, the faith that the US govt can tax to pay off all debts will fall and a rush for the exists may ensue. THAT would be bad since the US would be forced to inflate its way out and that would reduce the desire to hold the debt (and increase the borrowing costs) in the future once things are back on track.
debt can be a bad thing if used improperly (over-leveraged funds etc.)
overall i'd think a national debt is a good thing. i haven't read up on this so i can't add anything technical from some unknown book (sorry evan [img]/images/graemlins/frown.gif[/img] )
Barron
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