10-07-2011, 04:47 AM
Dakota wrote:
The "good faith and credit" gets destroyed when you spend money you don't have and borrow from Visa to make your mortgage payments. Tea Party can't do that but Obama can and has.
Government-borrowing is not the same as consumer credit loans. The mechanisms, choices and consequences are utterly different in every respect.
You seem to think that the problem is that the federal deficit is too big. That's not the case. The main problem with our government's response to the economic downturn is that there isn't enough deficit spending and along with that, much of the deficit money that should go to public works is being diverted to support foreign wars and thus is not boosting our nation's economy.
Reducing the deficit without increases in spending on public works and public welfare projects will almost always raise unemployment and lower revenues, creating a multiplier effect that drags the economy down. Productivity generally follows output (spending), not spending-reductions.
The risk of a high deficit is inflation, but that can be managed with smart monetary policies.
It's basic macroeconomics.