[quote=flu]
Just look at how this fiscal cliff is being handled. Everyone’s trying to be “delicate” about it… Neither side wants to fall of the cliff and actually cut spending..They’re talking about deficit reduction when they really should be talking about debt reduction….
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No, they shouldn’t be talking about debt reduction or even talking about cutting spending. They should be talking about improving the economy and maintaining the status quo until the economy improves. We do not have a debt crisis. We don’t have a spending crisis. We have a prolonged economic downturn. We currently have an annual deficit of about $1 trillion. A moderately growing economy, all by itself, would cut that down to about $400 billion a year. If we have a growing GDP, increasing debt by $.4T per year is not a big deal, particularly at current interest rates. It’s comparable to someone making $200K a year, with 3 to 5% raises every year, increasing their mortgage payments by a couple hundred dollars a month. I’m not claiming it’s a good idea to do it. Or preferable. But it is sustainable.
There are lots of huge financial decisions that this country has to make. But dealing with a debt crisis is not currently one of them.
