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What say you?

At this rate, how is it possible to even pay it off? Hopefully Trump can put a dent in it.

Believe it or not, the Health and Human Services Department has a bigger budget and less than 1/10th the employees. Also, the fradulent payments they make could be more that those paid by the Defense Department.

When you can't pay your bills, and save your money for emergency purposes you are doomed.

It just boggles my mind to look around me and see all of the money people borrow/spend on stupid shit. They have no savings, no retirement account, no health care or a health care savings plan. Nothing.

But somehow they have money for vacations, dinner out, ATV's, travel trailers, boats, new vehicle every 5 years. People are stupid.

The citizens of this country will never hold the government/politicians accountable for the debt it has accumulated because the citizens have a debt/spending problem themselves. People have an addiction to spending money and until that addiction is cured nothing will change.

That said, the modern economy is built on debt. It is the engine of economic growth and prosperity. It is not all bad.

One of the most ill- informed statements ever posted on this site.....by the guy who claims (or at least infers) that he's the smartest in the room.

Please elaborate. This should be good.

Without debt financing, companies wouldn’t have the capital to drive their growth and finance operations. Individuals would not have the means to purchase houses and cars. Whether you care to admit it or not, debt is the foundation upon which the modern economy grows - the willingness to lend money with the belief that the future will be better than the present.

The world didn’t always used to be that way. People thought the size of the economy was fixed and that the best times were now. The shift in belief that tomorrow would be better than today and a willingness to take the risk of issuing debt because of that belief is what has ushered in the mass prosperity of the modern age. Period.

Hamiltonian thinking was wrong in 1800 and it is wrong today. He was probably one of the first stupid "progressive liberals" .

Borrowers are subservient to lenders. Always have been. Not a good economic system.

"Never a borrower nor a lender be". Good advice.

What exactly is a “predator lender?” Are they forcing people to take loans?

Some argue that the invasion at our southern border is good. It is not good.

Just because we have existing "norms" doesn't mean those "norms" are good. It means we have become accustomed to "the way things are".

Massive debt is bad, and if allowed to continue to grow, whether privately or publicly, or both, it will ruin this nation.

No. But if you look at the increase in credit card debt over the last few years you realize that many people are buying groceries on credit cards at Biden- inflated prices just to feed their families. That is why Trump is proposing a large decrease in the rates credit card companies can legally charge.

And you know that, Ricky.

Credit card companies LOVE people in debt. Real money, not nickle and dime money, is made on financing vehicles. It's made when you FINANCE that vehicle. Or toy. Or _____ fill in the blank. The entire economy runs on financing.

Furthermore, if the government were to cap interest rates on credit cards, the lenders simply wouldn't extend credit to anyone unless they have a stellar credit rating. The fact is, anyone who is paying 20-30% interest on a credit card...it is because they are a poor credit risk to begin with.

And pigs feeding at the trough.

You mean increase revenue, right?

Just as I thought - you’re speaking to something entirely different than I was. This has nothing to do with the point I made which is the role of credit in ushering in the explosion in economic growth and prosperity worldwide and the importance of credit to the modern economy.

The entire economy runs on financing.

This was the point. Credit/debt is fundamental to how our economy operates and like Ricky said the global economy would collapse in a way that was unimaginable without credit.

As I mentioned, he does a masterful job of explaining how the scientific revolution went hand in hand with the growth of credit which led to the boom in global economic growth and wealth. There’s a website that has some excerpts from his book above - one of those excerpts speaks on this topic (there is much more in the actual book). I’ll paste part of the excerpt below as well as it says what I was trying to say much more eloquently…

That’s why many cultures concluded that making bundles of money was sinful. As Jesus said, “It is easier for a camel to pass through the eye of a needle than for a rich man to enter into the kingdom of God” (Matthew 19:24). If the pie is static, and I have a big part of it, then I must have taken somebody else’ slice. The rich were obliged to do penance for their evil deeds by giving some of their surplus wealth to charity.

If the global pie stayed the same size, there was no margin for credit. Credit is the difference between today’s pie and tomorrow’s pie. If the pie stays the same, why extend credit? It would be an unacceptable risk unless you believed that the baker or king asking for your money might be able to steal a slice from a competitor. So it was hard to get a loan in the pre-modern world, and when you got one it was usually small, short-term, and subject to high interest rates. Upstart entrepreneurs thus found it difficult to open new bakeries and great kings who wanted to build palaces or wage wars had no choice but to raise the necessary funds through high taxes and tariffs. That was fine for kings (as long as their subjects remained docile), but a scullery maid who had a great idea for a bakery and wanted to move up in the world generally could only dream of wealth while scrubbing down the royal kitchen’s floors.

It was lose-lose. Because credit was limited, people had trouble financing new businesses. Because there were few new businesses, the economy did not grow. Because it did not grow, people assumed it never would, and those who had capital were leery of extending credit. The expectation of stagnation fulfilled itself.

Then came the Scientific Revolution and the idea of progress. The idea of progress is built on the notion that if we admit our ignorance and invest resources in research, things can improve. This idea was soon translated into economic terms. Whoever believes in progress believes that geographical discoveries, technological inventions, and organizational developments can increase the sum total of human production, trade, and wealth. New trade routes in the Atlantic could flourish without ruining old routes in the Indian Ocean. New goods could be produced without reducing the production of old ones. For instance, one could open a new bakery specializing in chocolate cakes and croissants without causing bakeries specializing in bread to go bust. Everybody would simply develop new tastes and eat more. I can be wealthy without your becoming poor; I can be obese without your dying of hunger. The entire global pie can grow.

Over the last 500 years the idea of progress convinced people to put more and more trust in the future. This trust created credit; credit brought real economic growth; and growth strengthened the trust in the future and opened the way for even more credit. It didn’t happen overnight—the economy behaved more like a roller coaster than a balloon. But over the long run, with the bumps evened out, the general direction was unmistakable. Today, there is so much credit in the world that governments, business corporations, and private individuals easily obtain large, long-term and low-interest loans that far exceed current income.

People have been duped into thinking this is good and normal...

That is absolutely right, HDE.

Used responsibly...it is both "good and normal."

Credit is not new, it has been around for thousands of years.

Written rules of credit are contained in The Code of Hammurabi, which dates back to 1750 BC.

This. 100% this. You can argue that it’s a house of cards and it could all come crumbling down. But that doesn’t negate the undeniable role that credit has played in expanding economic growth and prosperity over the last 500 years or so.

We will never change and get better as a country until the irresponsible are made to suffer. Why should my tax dollars go to bail out a consumer or corporation that can't balance their budget. Can't pay your bills or mortgage? Why is that my problem?

Living on borrowed money is living on borrowed time. You can not spend your way to prosperity. You save your way there.

I was only pushing back on the notions that credit is neither "good or normal"...and even more so that people's debt problems are as a result of "predatory lenders."

The only thing I might disagree with is the following...

"You can not spend your way to prosperity."

Private expansion almost always requires spending...and most often borrowing. It is absolutely necessary for a healthy, growing economy.

I said debt. You pushed back on something that wasn't said...

In order to have “debt,” there must be “credit.”

They are two sides of the same coin.

And people have been "taught" that it's okay...

You’re arguing semantics.

If you had no credit, how did you accrue the debt? Chicken-Egg.

Little to no credit is almost always a result of irresponsible debt.

That’s not even close to accurate.

Thanks for making my point.

And here I thought your point was about modern economies not being built on credit and debt…and that whole “predator lender” thing.

I guess I must have misunderstood.

FYI - this is how the game is played: assets - good debt, liabilities - bad debt.

His last point was “more debt equals worse credit.” He hasn’t been right or relevant about a single thing on this thread.

FYI - this is how the game is played: assets - good debt, liabilities - bad debt.

Huh?? This makes zero sense, HDE. Assets are not debt. All debt is a liability in accounting terms. Clearly not all liabilities are bad.

As mentioned, debt you take on (which is always a liability on a balance sheet) can provide capital for growth, funds to support operations, the means to acquire assets, etc etc

This thread is starting to remind me of this...LOL

You seem to want to keep moving the goal posts in order to make this argument somehow work for you.

I don't remember anyone saying that "debt is good." Debt is necessary. It is necessary for governments, businesses, and families...and has been centuries.

Just curious...absent credit/debt, how do you think businesses are started or expanded? How do you think we won WWI and WWII? How do you think young families buy homes?

Are you suggesting that none of those things should happen unless and until they can be done with cash?

So yes, I guess to the extent it makes certain things possible...I guess it could be considered "good."

We are so far down the debt hole there is no going back. It would be political suicide for any elected official to suggest or put his/her foot down and say enough is enough. We are going to pay our bills and there will be pain for the masses.

Last year one of the local banks that I do the majority of my business with launched an advertising campaign to get people to open a savings account, money market or CD. I spoke to the bank manager as the rates they were offering were much better than the rates I was getting at the other local banks. I asked her what spurred this campaign. She told me that on a consistent basis there are more people that walk through the bank door everyday seeking a loan than making a deposit. She stated "Nobody saves anymore. All they want to do is spend"

Funny thing is, a savings account or CD is a "debt." The bank is borrowing your money, so they can use it to make money.

If debt is good, why is the $36 trillion national debt, interest on which now exceeds the defense budget, considered one of the greatest threats to the national security of the United States?

Debt can enable a lot of good things. Like Ricky highlighted in this question..."Just curious...absent credit/debt, how do you think businesses are started or expanded? How do you think we won WWI and WWII? How do you think young families buy homes?" Expanding businesses (ie, growing the economy), winning wars, buying homes, etc are all subjectively "good" things.

Obviously, debt carries risk. When the burden of debt becomes unsustainable - be it a personal, corporate, or government level - lots of bad things can happen. That doesn't mean all debt (or even most debt) is bad.

Regarding the US debt levels, you will get drastically different opinions on how bad it is. Trajectories have been concerning; it is becoming much more of a burden, but how much risk it poses is still up for debate. As it stands the credit rating of the US is still very high (despite debt obligations that are higher than every other country). I've attached a list of credit ratings by country for reference (note that most of the top 10 countries with the highest credit rating also hold the most debt, further dispelling the ridiculous notion that "more debt equals worse credit).

Please go back and read this thread from the beginning. When you get to the part that said "used responsibly...it is both "good and normal," ruminate on it for a while, and let it really sink in.

Now I suggest you look up the definition of a "strawman argument" and then maybe we can discuss this in an intelligent manner.

Not to mention illiterate...or delusional...or both. Take your pick.

Yep...I took advantage of higher interest rates over the last couple years also. And get this...they turn around and lend our money to someone else at an even higher rate. I see that as a win-win. That's a good thing.

The only thing I can't quite figure out is if that makes us the "predatory lender," or does that make the bank the "predatory lender...or are we both "predatory lenders?"

Or how about the millions of average individuals that own trillions of dollars in government securities. Are they "predatory lenders" too?

:)

Today our situation is that the debt is created by governments with an addiction to other people's money and many of today's payee's are furious with them for not being responsible.

When the federal government is unable to stop itself in it's irresponsibility, Article V of the Constitution provides a means to bypass the offenders and redefine the responsibility for handling national wealth. The Article V process involves multiple, serious deliberations whereby only that which is truly approved by the people will become law. The Constitution bears the marks of good intentions gone wrong in the 18th Amendment and a self correction in the 21st Amendment. An interesting note is that the 18th was ratified by state legislatures(politicians) and the 21st was ratified by ad hoc elected delegates(recognized community leaders) in state conventions, as was done for the Constitution itself in 1788.

The wealth of the nation is better managed in the hands of the most people and not a political system without a conscience or ability to determine true morality, or the everyday greedy unscrupulous persons in any sector of society. Most people in American live within their means while the government has ignored responsible money management.

Unless We The People repent of poor principles of self-government and a lack political engagement, some future generation will see the collapse of America.

I found this quite interesting. With all the talk of being owned by China...the reality is that China isn't even the largest country owning our debt let alone the largest entity. Not even close.

Does this sound foolish to you? Yeah, me too. Debt is not good because it can destroy individuals AND nations.

Do you really not understand debt?

So why not just keep printing money, increasing the national debt to the point that we create mass prosperity for all US citizens?

This is - in a nutshell - exactly what has been happening.

Could we print enough dollars to simply pay off the national debt?

Theoretically, yes...but this would have massive ramifications on other aspects of the economy (inflation, value of the dolllar, etc etc etc).

With the utmost respect, the point you seem to be consistently missing is that whether or not debt is "good" or "bad" is largely a function of the individuals or entities ability to service that debt.

If debt, any amount of debt can be serviced (paid in a timely manner without causing downstream ramifications-great case in point for BEG's pointing out the inflationary outcome of printing excess currency) then it is not only "good" debt but it's very good in that it's the engine driving a thriving economy; such an economy creates jobs, grows the tax base and improves the standard of living for it's citizens.

Debt that cannot be serviced (think Greece) is a drag on the economy (and even the global economy). I think you've had a tendency to lump all debt in the latter category and that's where you're going wrong.

You keep going back to the same misinterpretation (intentional apparently) that anyone here claimed that all "debt is good. Nobody ever said that...nor did anyone (other than you) ever imply that.

Responsible debt is good...even essential. Irresponsible debt is bad.

What part of that aren't you quite comprehending?

"Responsible debt is good...even essential. Irresponsible debt is bad."

I agree with that.

What's the limit on debt that a country should be able to hold in your opinion?

Again, I don’t think anyone here disagrees. However, it was also you that pivoted to…

”Tell that to hard working men and families who have been devastated by predator lenders and their 30% interest rates.”

And when BEG said this…

"That said, the modern economy is built on debt. It is the engine of economic growth and prosperity. It is not all bad"

You replied with…

”One of the most ill- informed statements ever posted on this site.....”

With all due respect, you’ve been all over the board on this…and mostly inaccurate.