The total amount isn't a problem. It's just a number.

Not going to disagree that some spending is wasteful and some could be better spent.

(06-06-2017 01:10 PM)MplsBison Wrote:  The total amount isn't a problem. It's just a number.

Not going to disagree that some spending is wasteful and some could be better spent.

Is the interest we pay each year on that borrowed money just a number too?

It is all real money. It has to get paid back.

And the lenders don't really care when/if it gets paid back ... because the money they lend already comes back to them, essentially.

(06-06-2017 02:52 PM)MplsBison Wrote:  And the lenders don't really care when/if it gets paid back ... because the money they lend already comes back to them, essentially.

They sure as hell do.

Also, again, what about the drain that the interest payments cause on the treasury?

(06-06-2017 03:35 PM)GeorgeBorkFan Wrote:  

(06-06-2017 02:52 PM)MplsBison Wrote:  And the lenders don't really care when/if it gets paid back ... because the money they lend already comes back to them, essentially.

They sure as hell do.

Also, again, what about the drain that the interest payments cause on the treasury?

Yeah...that comment didn't make much sense to me either.

Maybe he just means the lenders aren't worried because it's the USA??

(06-06-2017 03:35 PM)GeorgeBorkFan Wrote:  They sure as hell do.

Says you? I don't see any articles about "demands for US debt repayment imminent".

(06-06-2017 03:35 PM)GeorgeBorkFan Wrote:  Also, again, what about the drain that the interest payments cause on the treasury?

How much are those payments? What level constitutes a "drain"?

(06-07-2017 09:11 AM)MplsBison Wrote:  

(06-06-2017 03:35 PM)GeorgeBorkFan Wrote:  They sure as hell do.

Says you? I don't see any articles about "demands for US debt repayment imminent".

(06-06-2017 03:35 PM)GeorgeBorkFan Wrote:  Also, again, what about the drain that the interest payments cause on the treasury?

How much are those payments? What level constitutes a "drain"?

Look it up. Soon we will be paying 10% of our entire budget towards intereset payments.

At the same time, educate yourself on how interest rate fluctuation (increasing) will lead to much more burdensome interest payments out of the budget.

(06-07-2017 09:59 AM)GeorgeBorkFan Wrote:  Look it up. Soon we will be paying 10% of our entire budget towards interest payments.

Fair enough, but I don't see why this is necessarily a bad thing or a "drain". What is this preventing us from doing?

More importantly, if we reduced govt spending to an amount such that we wouldn't need to borrow money ... what would that affect? How would that affect the country's quality of life, especially for people who depend on govt spending/programs? You can't simply decided that because you would be better off, that everyone else in the country would be better off.

(06-07-2017 09:59 AM)GeorgeBorkFan Wrote:  At the same time, educate yourself on how interest rate fluctuation (increasing) will lead to much more burdensome interest payments out of the budget.

The interest rate on a loan is usually locked in at the time, unless it's specifically a loan with a non-fixed rate. For example, on a standard 30 year fixed mortgage, the interest rate doesn't change simply because the prime lending rate has changed since the loan was originated.

(06-07-2017 10:20 AM)MplsBison Wrote:  

(06-07-2017 09:59 AM)GeorgeBorkFan Wrote:  Look it up. Soon we will be paying 10% of our entire budget towards interest payments.

Fair enough, but I don't see why this is necessarily a bad thing or a "drain". What is this preventing us from doing?

More importantly, if we reduced govt spending to an amount such that we wouldn't need to borrow money ... what would that affect? How would that affect the country's quality of life, especially for people who depend on govt spending/programs? You can't simply decided that because you would be better off, that everyone else in the country would be better off.

Sigh. Because the 10% of the budget will be paid purely to interest, while not even touching principal. Are you saying that there is no better use for 10% of the budget than for paying interest? It could be spent many other ways, or taxes could be cut.

MplsBison Wrote:

(06-07-2017 09:59 AM)GeorgeBorkFan Wrote:  At the same time, educate yourself on how interest rate fluctuation (increasing) will lead to much more burdensome interest payments out of the budget.

The interest rate on a loan is usually locked in at the time, unless it's specifically a loan with a non-fixed rate. For example, on a standard 30 year fixed mortgage, the interest rate doesn't change simply because the prime lending rate has changed since the loan was originated.

This isn't a mortgage.

Plus, right now, the government is only paying interest on existing debt. When that debt is due, they roll it into new debt, as a new interest rate. Additionally, we are constantly borrowing even more (new) money at current rates. Those rates only have one place to go - up.

(06-07-2017 01:16 PM)GeorgeBorkFan Wrote:  Because the 10% of the budget will be paid purely to interest, while not even touching principal. Are you saying that there is no better use for 10% of the budget than for paying interest? It could be spent many other ways, or taxes could be cut.

You say I'm forgetting that the 10% could be used elsewhere.

I counter you with: you're forgetting the other side of the equation, that we're getting money to spend in the loan.

(06-07-2017 01:16 PM)GeorgeBorkFan Wrote:  Plus, right now, the government is only paying interest on existing debt. When that debt is due, they roll it into new debt, as a new interest rate. Additionally, we are constantly borrowing even more (new) money at current rates. Those rates only have one place to go - up.

Fine, if we never pay any debt, it must eventually be re-borrowed at the current rate. Sure, rates might go up some.


But, elementarily, so long as the amount borrowed exceeds the interest payments ... we're putting more in than has to come out.

(06-07-2017 01:52 PM)MplsBison Wrote:  

(06-07-2017 01:16 PM)GeorgeBorkFan Wrote:  Because the 10% of the budget will be paid purely to interest, while not even touching principal. Are you saying that there is no better use for 10% of the budget than for paying interest? It could be spent many other ways, or taxes could be cut.

You say I'm forgetting that the 10% could be used elsewhere.

I counter you with: you're forgetting the other side of the equation, that we're getting money to spend in the loan.

I'm not forgetting. We have to pay it back all the money we borrow, eventually.

MplsBison Wrote:

(06-07-2017 01:16 PM)GeorgeBorkFan Wrote:  Plus, right now, the government is only paying interest on existing debt. When that debt is due, they roll it into new debt, as a new interest rate. Additionally, we are constantly borrowing even more (new) money at current rates. Those rates only have one place to go - up.

Fine, if we never pay any debt, it must eventually be re-borrowed at the current rate. Sure, rates might go up some.


But, elementarily, so long as the amount borrowed exceeds the interest payments ... we're putting more in than has to come out.

Since we have to pay it back eventually...

This thread should be either stickied or bookmarked in some way for easy reference in the future when a discussion of how someone or something can become so overwhelmed in debt. All one would have to do is link this thread and say "Read the 'thought process' of Mpls here and you'll understand."

(06-07-2017 04:11 PM)GeorgeBorkFan Wrote:  I'm not forgetting. We have to pay it back all the money we borrow, eventually.

(06-07-2017 04:11 PM)GeorgeBorkFan Wrote:  Since we have to pay it back eventually...

And I'm asking the question: should fear of having to pay back the money "one day" in the future stop us from realizing the good that can come from the borrowed principle now?

There is really nothing wrong with buying things on credit.

Only when D's are in charge evidently. You watch. These hypocrites will pass the debt ceiling. Only when a D is in charge will they showboat. You watch.

(06-07-2017 05:11 PM)Machiavelli Wrote:  Only when D's are in charge evidently. You watch. These hypocrites will pass the debt ceiling. Only when a D is in charge will they showboat. You watch.

Probably right, and that's one reason why I'm not a republican. We don't need a party to be democrat-lite.

(06-07-2017 05:00 PM)MplsBison Wrote:  

(06-07-2017 04:11 PM)GeorgeBorkFan Wrote:  I'm not forgetting. We have to pay it back all the money we borrow, eventually.

(06-07-2017 04:11 PM)GeorgeBorkFan Wrote:  Since we have to pay it back eventually...

And I'm asking the question: should fear of having to pay back the money "one day" in the future stop us from realizing the good that can come from the borrowed principle now?

There is really nothing wrong with buying things on credit.

It isn't "fear" that we have to pay it back. It is reality. Remember that this money isn't just from "China." Many of your co-workers, relatives and neighbors are invested in treasury instruments via their 401k or their pensions. The value of those investments are based upon an assumption of repayment.

We aren't buying things on credit. That implies we are paying back the principal and interest.

You seem to think the funds that are borrowed won't be paid back and are in essence, a tax.