[quote=pri_dk][quote]First, the collateral issue is a red herring […][/quote]
And a country doesn’t really have a balance sheet the same way an individual or corporation does.
What are the assets of the Federal government? (e.g. what is Yosemite worth? – could we sell it to raise some cash?)
Dave makes the important points – including the point that cash flow is the dominant factor in this issue.
Many people fall into the trap of comparing government debt to personal/consumer debt. There are key differences.
Debt is not always bad, and the situation is not as bad as many make it out to be.
(Don’t agree that debt is not always bad? Then answer this: Why is Rich’s investment firm suggesting that it would be a very smart move for people to refinance into a 30 year loan right now?)[/quote]
Another important issue is that the govt. doesn’t account for spending they way a corporation would. Specifically, the govt. doesn’t differentiate between “investments” (the cost for which would be amortized over a period instead of expensed on Day 1) and “operating expenses,” which go down a rabbit hole.
Again, all in all, the US is not a particularly healthy creditor… but we’re far from dying.
