High Deficits

[theogt]

Can someone explain to me like I'm a 6 year old why high deficits (particularly during a recession) are bad?

 

[Sheik]

If I had a 6 year old that asked me that, I'd probably spank his ass and tell him cuz daddy said so.

 

[VA Cowboy]

Ask Greece

 

[theogt]

Ask Greece

Explain it to me like I'm a 6 year old. What happened to Greece that is in danger of happening to the US?

 

[theogt]

This thread is really going places.

 

[lons]

Greece has spent years letting folks retire at early ages and live on "pensions" which is just a funny way of saying for free. Their population has grown old and there isn't enough young folks to pay for the older folks way of life. Instead of the older folks, when asked to by the men in charge of the Country if they would either find jobs or take less money, saying, ok. They said no, the Grecian GDP which is just a fancy way of saying, how much money they make in a year as a whole has gone down over and over to the point that other Countries are now having to pay for their mistakes while their own folks are still saying, no way jose. I still want my pension.

If this doesn't sound similar to where the US is heading. Then I'd say you need to stop acting like a 6 year old. Put on your adult diaper and go read about our economy.

 

[dbair1967]

Can someone explain to me like I'm a 6 year old why high deficits (particularly during a recession) are bad?

I guess if you have a government that thinks it can just keep printing money, high deficits arnt bad.

Once you get past the realization that you cant just keep printing money, the reason high deficits are bad are obvious. Eventually somebody has to pay for it.

 

[VA Cowboy]

Explain it to me like I'm a 6 year old. What happened to Greece that is in danger of happening to the US?

Just do like Obama does...forget about it and go outside and play.

 

[Plymkr]

Just do like Obama does...forget about it and go outside and play.

lol

Epic...

 

[dbair1967]

Just do like Obama does...forget about it and go outside and play.

Almost vacation time for him. Where is it this yr, Martha's Vineyard for ten days?

 

[peplaw06]

Can someone explain to me like I'm a 6 year old why high deficits (particularly during a recession) are bad?

You mean, why is it bad to spend more money than you have?

 

[theogt]

I guess if you have a government that thinks it can just keep printing money, high deficits arnt bad.

Once you get past the realization that you cant just keep printing money, the reason high deficits are bad are obvious. Eventually somebody has to pay for it.

If the reasons are obvious, please explain them to me.

 

[theogt]

You mean, why is it bad to spend more money than you have?

Yes, why is that bad? I can think of many reasons why it's a good thing. Many successful businesses constantly take on additional debt.

 

[dbair1967]

Yes, why is that bad? I can think of many reasons why it's a good thing. Many successful businesses constantly take on additional debt.

And what happens to said busnesses when they can never pay it back?

Come on Theo, you are smarter than this.

 

[peplaw06]

Yes, why is that bad? I can think of many reasons why it's a good thing. Many successful businesses constantly take on additional debt.

Guess it depends on your debt-to-income ratio. It's not bad to have any debt at all. It's bad to pile up debt until you become insolvent. And when you continue to borrow and spend beyond your means after you are insolvent, then you're looking at a disaster.

 

[theogt]

And what happens to said busnesses when they can never pay it back?

Come on Theo, you are smarter than this.

Many successful businesses will constantly run large amounts of debt in perpetuity. It's not that they can't pay it back (though most cannot pay it back but can only refinance it) it's that they don't want to pay it back because it's a bad business decision to do so.

Are you suggesting that the U.S. cannot service its debt?

 

[theogt]

Guess it depends on your debt-to-income ratio. It's not bad to have any debt at all. It's bad to pile up debt until you become insolvent. And when you continue to borrow and spend beyond your means after you are insolvent, then you're looking at a disaster.

So, the U.S. is in danger of being insolvent?

 

[peplaw06]

So, the U.S. is in danger of being insolvent?

We had to raise the debt ceiling a couple of weeks ago, or we were going to start defaulting on loans. Borrowing money for no purpose other than to pay back other debts doesn't appeal to me much. Personally, I just don't think that's a good way to do business. Admittedly I'm not a business expert.

 

[dbair1967]

Many successful businesses will constantly run large amounts of debt in perpetuity. It's not that they can't pay it back (though most cannot pay it back but can only refinance it) it's that they don't want to pay it back because it's a bad business decision to do so.

Are you suggesting that the U.S. cannot service its debt?

Are you ok with paying ridiculously higher taxes?

 

[theogt]

We had to raise the debt ceiling a couple of weeks ago, or we were going to start defaulting on loans. Borrowing money for no purpose other than to pay back other debts doesn't appeal to me much. Personally, I just don't think that's a good way to do business. Admittedly I'm not a business expert.

The U.S. Raises its debt ceiling all the time. That may or may not be a bad thing. If it's a bad thing, I'm asking why.

Are you ok with paying ridiculously higher taxes?

But tax revenues are at all time lows. That's the single biggest reason there are high deficits.