Econ: Please explain why the feared outcome of this concept is flawed and simplistic

[Zkribbler]

Originally posted by Zylka
In other words, you don't know in depth econ either. Great, next

It doesn't take a genius. Let me explain it to you:

Usually, borrowing is a bad idea. You borrow a dollar from me and have to pay back two. Are you better off or worse off? Worse off--because you're down a dollar.

Sometimes, borrowing can be good. You borrow a dollar from be, invest it, get back the original dollar plus two more, pay me my two dollars and keep the third dollar for yourself. Are you better off or worse off? Better off--because you're up a dollar.

What has Bush done? He's borrowed more money than any other President in history. Has he invested it? No.

He's given most to the richest Americans, hoping they'd let money trickle down into the rest of America. They haven't. We're three million jobs down and after three years the economy is starting to slog its way back to where Bush took over. Bush squandered the rest of the borrowed money on Iraq. No return on investment there.

So all Bush's borrowing has done it to put the U.S. in the biggest financial hole in the history of humanity.

[Verto]

Oh, what love I have for Zylka's posts.

EDIT: Too bad they disappear.

[Ned]

You know, Z, in retrospect, FDR should not raised tax rates the way he did during WWII. He should have financed the whole war through deficit spending. We had suffered for years with deflation until WWII. The deficit spending erased all that and really got the economy booming.

A booming economy means jobs, prosperity and growth.

It is really hard to justify a budget surplus when you come to think about it. So long as the growth rate equals or exceeds the growth of the national debt as a percentage of GNP budget deficits seem to be good as they spur economic growth.

[monkspider]

Uh oh, looks like Zylka's banned again.

[Zylka]

hi ho the kween?

[Urban Ranger]

Ned,

Are you a Keynesian?

[Adam Smith]

Zylka:

You may not like the tone of the post, but he's right. The US is borrowing money to pay for current consumption. That means we have less money available to replace our current capital that wears out, or buy new capital we need. Governments should only do this sort of thing to finance a really big war (WWII, not this Gulf stuff) or fight off a big recession (1930's, 1970's). Otherwise governments should be able to balance their spending over the business cycle. What we are doing is breaking open our piggybank to buy candy. Another reason I'm really pissed off at Bush.

Mr. Fun:

I am honored.


Laz:

Your just jealous because we get all the wimmens.