Democratic policies are better for the economy than Republican policies.

[Spider-Dan]

Which is why I said these types of debt "CAN BE" detrimental.

You contrasted student loans, credit cards, and car loans to housing or business debt.  My point is that either kind of debt can be good or bad... it's situational.

Ultimately, I would put it this way:

1) Debt is a tool that you can use to achieve goals, and like any tool, it can be used either wisely or foolishly.
2) We should never compare personal debt of individuals to that of the government.  The government has many tools to resolve debt that are not available to you and I.

[Dave Gray]

Just as an aside, I work in a field where I deal with people who are dealing with debt and credit.  It's shocking how little many, many people understand about what credit is and how it works.  ...and how to make smart decisions around it.

[pondwater]

If you read the post by Hoodie that I quoted it had to do with going into debt by individuals, and my post (which you quoted) was in specific response to that.  It had nothing to do with what you are referring to above.

Sorry, I thought we were talking about government debt and policies. My post was mostly referring Fau's post. My apologies sir.

[pondwater]

2) We should never compare personal debt of individuals to that of the government.  The government has many tools to resolve debt that are not available to you and I.

I disagree completely. There is no tool available to the US government that will resolve $22 trillion in debt except to spend less and pay it off as quickly as possible. Which by the way is the same tool that you or I would use. But they won't do that, they will just keep kicking the can down the road until we crumble like many before us.

[Spider-Dan]

There is no tool available to the US government that will resolve $22 trillion in debt except to spend less and pay it off as quickly as possible. Which by the way is the same tool that you or I would use.

This is factually false.  The US government has the legal option to order the printing of $22 trillion tomorrow and immediately resolve all outstanding debt.  This option is not available to you or I.

Now, you could argue that this would be a bad idea because it would devalue the dollar... but then you would necessarily be arguing that keeping our debt is preferable to legally printing enough money to immediately resolve it .  And the one thing that would unquestionably devalue the dollar more than printing lots of money would be simply refusing to pay our debt (i.e. not raising the debt ceiling).

[pondwater]

This is factually false.  The US government has the legal option to order the printing of $22 trillion tomorrow and immediately resolve all outstanding debt.  This option is not available to you or I.

Now, you could argue that this would be a bad idea because it would devalue the dollar... but then you would necessarily be arguing that keeping our debt is preferable to legally printing enough money to immediately resolve it .  And the one thing that would unquestionably devalue the dollar more than printing lots of money would be simply refusing to pay our debt (i.e. not raising the debt ceiling).

Never mind, I should have known you were going to say something retarded like that. Carry on sir...

[Spider-Dan]

I don't think it's "retarded" to point out the fact that the government can (and does!) print money, and that you and I do not have that available as a legal option to resolve debt.

[BuccaneerBrad]

I don't think it's "retarded" to point out the fact that the government can (and does!) print money, and that you and I do not have that available as a legal option to resolve debt.

An option but robbing Peter to pay Paul is never a good option

[pondwater]

An option but robbing Peter to pay Paul is never a good option

Not a viable option.

[Spider-Dan]

An option but robbing Peter to pay Paul is never a good option

If you're talking about individuals, robbery is illegal.
If you're talking about the government, legally printing money is in no way comparable to robbery.

[pondwater]

If you're talking about individuals, robbery is illegal.
If you're talking about the government, legally printing money is in no way comparable to robbery.

Stop being purposefully obtuse. You know what he means. Moving debt from one place to another doesn't mean the debt is gone.

Printing money causes debt. Creating money out of thin air is adding an asset in the private sector, which adds a liability to the public sector on the books. Hyperinflation ensues, the economy crashes, tax revenue declines, and the country crumbles into a death spiral. You cannot reduce debt by creating more or using magical math tricks. The only way to reduce debt is to pay it off legitimately or if the debt is forgiven somehow.   

Is that the TOOL you were saying the government could used to absolve its debt? Your magical government tool would be exponentially worse than not raising the debt ceiling, LMFAO......

Not to mention, it will never happen. Any other bright ideas?

[Spider-Dan]

Printing money does not cause debt.  Period, full stop.
If you don't understand that basic fact, this discussion is pointless.

[pondwater]

Printing money does not cause debt.  Period, full stop.
If you don't understand that basic fact, this discussion is pointless.

You obviously don't understand how it works. Printing more money causes inflation. Or in your example of printing $22 trillion, it would cause hyperinflation. Which basically is shifting the government debt on to the people through debasing that dollar and higher prices. Which in turn would have a dramatic effect on tax revenue. The basic fact is that you can't just make $22 trillion disappear, you can only move it around.

And you are correct, this discussion is pointless since your premises that the government can just print $22 trillion and it would solve our debt problem. That is stupidity of the highest order.

[Dolphster]

You obviously don't understand how it works. Printing more money causes inflation. Or in your example of printing $22 trillion, it would cause hyperinflation. Which basically is shifting the government debt on to the people through debasing that dollar and higher prices. Which in turn would have a dramatic effect on tax revenue. The basic fact is that you can't just make $22 trillion disappear, you can only move it around.

History supports your comments.  From Weimar Germany after the Treaty of Versailles where the printing of money caused hyperinflation of 30,000% per month (prices of goods literally doubled every few days), to Zimbabwe between 2007 and 2009 where they printed so much money that the inflation rate was a staggering 79 BILLION % perm month, to post WWII Hungary where printing money caused an annual inflation rate of 13 QUADRILLION % and prices of good doubled every 15 hours to a large number of Latin American countries over the last 40 years have printed money to the point where it become pretty much devoid of any value.  But ya know, god forbid we actually learn something from history. It really isn't that hard of a concept so I don't know why people don't get that.  This is the kind of stuff that they teach on day one of a high school economics class. 

[Spider-Dan]

Yes, printing money causes inflation, and printing a lot of money in a short time creates hyperinflation.  But that isn't the same thing as debt.  So the statement "Printing money causes debt" is categorically false.  Debt may be bad, and inflation may be bad, but that doesn't mean they are the same thing.  Words matter.

And while we're on the subject of Things That Are Bad: however bad inflation (or even hyperinflation) might be, it is unquestionable that outright refusing to pay your debt (i.e. refusing to raise the debt ceiling) is far worse.  Inflation means that the payment for the debt has reduced value; refusal to pay the debt means the payment has zero value (because there is no payment).

Let's keep in mind that the ability to legally print money (again: something the gov't can do and individuals cannot) is flexible.  If the US government wants to resolve the current debt, it doesn't have to print one single $22T coin and deposit it in the Treasury; it can print an extra $1T for the next 22 years, or an extra $2T for the next 11 years, or any other combination.  Any option would be better than defaulting on our debt.