# How important is the debt? **URL:** \ **Category:** Great Debates\ **Created:** [January 26, 2020, 3:08pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992 "2020-01-26T15:08:53Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [February 1, 2020, 3:09am UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/41 "2020-02-01T03:09:08Z")
> [@Velocity](#): > > Right, but since \*\*Jasmine \*\*mentioned the claim that the world is a cumulative $217 trillion in debt (which is about $27,000 per human on the planet,) I figured the only way that claim/cite could be correct would be if it weren’t by the accounting method you mention, but rather, someone tallying up every single outstanding debt in its own right. > > It doesn’t seem quite possible that the world could have a _ **negative $217 trillion** _ net worth/balance by the undergrad accounting method. I agree. Shouldn’t the world’s debt be zero? For every debtor, there is a corresponding creditor, or am I missing something? ---
**Author:** ![2ManyTacos](https://avatars.discourse-cdn.com/v4/letter/2/3da27b/32.png) [@2ManyTacos](https://boards.straightdope.com/u/2ManyTacos)\ **Post date:** [February 1, 2020, 8:12am UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/42 "2020-02-01T08:12:29Z")
After the Obama years, I am firmly of the mind that at least _politically,_ no, the debt/deficits do not matter at all, and I would love it if we could have the next Democratic president publicly pledge to never give two f’s about the deficit. And when the Republicans inevitably feign deficit hysteria again, the Democrats must swiftly tell the GOP to screw off. Maybe there might be some far off space brain future where the deficit may become an issue, but we’ll just deal with that problem at that time. But for now, nah, deficits are superfluous. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 1, 2020, 8:20am UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/43 "2020-02-01T08:20:34Z")
> [@UltraVires](#): > > I agree. Shouldn’t the world’s debt be zero? For every debtor, there is a corresponding creditor, or am I missing something? 😕 Books balance. The sky is blue. The Pope is Catholic. And Generalissimo Franco is still dead. Start a thread in _Thread Games_ if these truisms amuse you. If you owed me a half million dollars I wouldn’t be pleased to hear you say that “debt is zero.” ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 1, 2020, 9:37am UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/44 "2020-02-01T09:37:58Z")
My last post was MUCH too snarky. I apologize. :o It’s childish of me, but I get irritated when my posts are ignored. Of course NET debt can be defined to be zero, but I’d thought I’d already disposed of this, in the context of OP’s question, at least in regard to corporate debt, with > [@septimus](#): > > **Velocity** ’s point is valid … [but] much debt is NOT circular. Industrial corporations owe trillions to pension funds, not vice versa. U.S. entities owe huge sums to Japanese entities, not vice versa. (Japan’s own huge debt is owed to other Japanese.) > > With record low interest rates, U.S. corporations have been borrowing heavily, often not using the proceeds to invest in the future, but for dividends and stock buybacks. > > The high leverage makes corporations vulnerable to even slight slowdowns. When recession comes, some corporations will default… ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [February 1, 2020, 2:29pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/45 "2020-02-01T14:29:27Z")
> [@septimus](#): > > Contrary to right-wing dogma, U.S. entrepreneurs kept on entrepreneuring (and at an unprecedented rate) despite the 39.6% income tax. \*\*The 1993 Budget led directly to one of the most prosperous periods in American history. \*\*At the beginning of Clinton’s term, the federal debt was seen as a most important problem; by the end of the term the U.S. Treasury was redeeming its bonds at an unprecedented rate and there was concern that this would cause trouble! (Many contracts were tied to the price of Treasury debt instruments which were disappearing.) And the difference between the economic growth of the 1990s is that we were in better shape to deal with a sharp recession. The growth of the 1990s was fueled on debt but not to the extent that it was in the 2000s and now, with consistently low interest rates, stock buybacks, and other financial tricks. We’re due for a recession and the longer this energy drink-like fake growth continues, the worse the recession will be when it arrives. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [February 1, 2020, 4:10pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/46 "2020-02-01T16:10:49Z")
> [@asahi](#): > > And the difference between the economic growth of the 1990s is that we were in better shape to deal with a sharp recession. The growth of the 1990s was fueled on debt but not to the extent that it was in the 2000s and now, with consistently low interest rates, stock buybacks, and other financial tricks. We’re due for a recession and the longer this energy drink-like fake growth continues, the worse the recession will be when it arrives. What do you mean by “fake growth”? Are you saying the economy is built on another bubble, like the housing bubble in 2007/2008? Or something else? I think current growth is real, and has been a continuation of the recovery that begin in 2010 after the financial crash. I do worry about having too much debt, the effect on growth of debt service, and having less fiscal room to maneuver when we have the next recession. But I don’t see today’s growth as “fake”. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [February 1, 2020, 4:14pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/47 "2020-02-01T16:14:42Z")
> [@UltraVires](#): > > I agree. Shouldn’t the world’s debt be zero? For every debtor, there is a corresponding creditor, or am I missing something? Interest. If I loan you $10 at 0 interest, then you can pay that back with the $10 that John owes you that he got back from Peter. If I charge you interest, then you need to come up with more money, which means you need to charge John more money, which means that he has the charge Peter more money. That money can never be fully paid back without increasing the money supply, which you cannot do without issuing more debt. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [February 1, 2020, 4:19pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/48 "2020-02-01T16:19:10Z")
> [@survinga](#): > > What do you mean by “fake growth”? Are you saying the economy is built on another bubble, like the housing bubble in 2007/2008? Or something else? I think current growth is real, and has been a continuation of the recovery that begin in 2010 after the financial crash. > > I do worry about having too much debt, the effect on growth of debt service, and having less fiscal room to maneuver when we have the next recession. But I don’t see today’s growth as “fake”. Yes, the economy is in a bubble that is financed by federal debt. That trillion dollar give away in the tax bill translated into hundreds of billions of dollars of growth in the valuation of companies. Executives paid themselves more, and more money was divested to stockholders. All this money worked to stimulate the economy. Unfortunately, this stimulus if very inefficient and certainly not sustainable. If you think that the current growth is real, can you point to the factor that allows us to have a longer period of growth than any other in a modern economy that is not based on increasing deficit spending? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [February 1, 2020, 5:49pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/49 "2020-02-01T17:49:09Z")
> [@septimus](#): > > 😕 Books balance. The sky is blue. The Pope is Catholic. And Generalissimo Franco is still dead. Start a thread in _Thread Games_ if these truisms amuse you. > > If you owed me a half million dollars I wouldn’t be pleased to hear you say that “debt is zero.” I was responding to another poster’s contention that the entire world was $217 trillion in debt. I was simply trying to confirm that such a thing would be impossible unless we are loaning money to Martians or something. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [February 1, 2020, 6:18pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/50 "2020-02-01T18:18:10Z")
> [@survinga](#): > > What do you mean by “fake growth”? Are you saying the economy is built on another bubble, like the housing bubble in 2007/2008? Or something else? I think current growth is real, and has been a continuation of the recovery that begin in 2010 after the financial crash. > > I do worry about having too much debt, the effect on growth of debt service, and having less fiscal room to maneuver when we have the next recession. But I don’t see today’s growth as “fake”. Sure, there’s seemingly real economic activity going on. The profits are real, but the stock valuation isn’t necessarily real. Consumer demand is real but it’s increasingly satisfied with consumer debt. A related problem is that there is real competition to satisfy the appetite for growing consumption, which itself leads to riskier lending practices. But beyond competition, the flat interest rates makes it hard for traditional lenders to make money on traditional banking services, which makes it tempting to get involved in derivatives and other types of financial instruments, some of which aren’t that well understood or regulated. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [February 1, 2020, 6:19pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/51 "2020-02-01T18:19:30Z")
> [@Jasmine](#): > > I read somewhere that, as a global conglomerate, we are 217 trillion dollars in debt. It seems to be business as usual every day, so it doesn’t seem to make much difference. That also means that as a global conglomerate, we have 217 trillion dollars in assets. A debt is a liability on the debtors’ books, and an asset on the creditors’ books. For example, when you buy a T-Bill, that’s a debt for the US Treasury, but an asset for you. That is business as usual. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [February 1, 2020, 6:28pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/52 "2020-02-01T18:28:22Z")
> [@k9bfriender](#): > > Yes, the economy is in a bubble that is financed by federal debt. I’m not necessarily referring to federal debt here; I’m referring to political manipulation of the federal reserve to hold interest rates below where they should be. Moreover, considering how well this administration has regulated the aviation industry, it’s probably a safe bet that they’re not particularly interested in regulated finance - and that’s a multi-trillion dollar powder keg waiting to detonate. > [@k9bfriender](#): > > That trillion dollar give away in the tax bill translated into hundreds of billions of dollars of growth in the valuation of companies. Executives paid themselves more, and more money was divested to stockholders. All this money worked to stimulate the economy. Unfortunately, this stimulus if very inefficient and certainly not sustainable. I would basically agree with this - it would seem that most of the money went back into corporate profits and dividends. If you’re a holder of an IRA and 401K, I suppose you’re relatively happy, but the real winners were the CEOs who turned in record profits and got compensation for them. The assistant manager working on the floor of the factory or retailer probably got very little in extra wages, and you can thank people like Bernie Sanders for whatever increases they did get. It’s not necessarily the length of the economic run that concerns me – it’s entirely possible for Obama to hand over the keys and for Trump to keep the economic engine going. But what concerns me is the emphasis on growth over stability, which is a traditional Republican economic philosophy. It usually ends in bank failures, corporate liquidation, market crashes, lost jobs, drug epidemics, and perhaps a few CEOs making a perp walk. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [February 1, 2020, 7:00pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/53 "2020-02-01T19:00:03Z")
> [@asahi](#): > > I’m not necessarily referring to federal debt here; I’m referring to political manipulation of the federal reserve to hold interest rates below where they should be. Moreover, considering how well this administration has regulated the aviation industry, it’s probably a safe bet that they’re not particularly interested in regulated finance - and that’s a multi-trillion dollar powder keg waiting to detonate. Yeah, the artificially low interest rates are concerning. It’s a mixed bag for me, because as a business owner, I do benefit from cheap credit, but I certainly see that larger picture and how it’s going to blow up. If the economy was a good as Trump says it is, then we should be raising interest rates and taxes. Partly because we don’t want to grow too fast, but mostly so that we have some breathing room to stimulate the economy by lower taxes and interest in the inevitable upcoming recession. > [@](#): > > I would basically agree with this - it would seem that most of the money went back into corporate profits and dividends. If you’re a holder of an IRA and 401K, I suppose you’re relatively happy, but the real winners were the CEOs who turned in record profits and got compensation for them. The assistant manager working on the floor of the factory or retailer probably got very little in extra wages, and you can thank people like Bernie Sanders for whatever increases they did get. If you are holding a 401k or IRA, then right now you may be happy, but unless you are planning on cashing it out right now, then it’s just numbers on paper, and doesn’t mean anything at all. Will they still be happy with their retirement savings in a few decades when they actually need them? Will these short term boosts to their numbers hold up? My guess is no. Right now they are contributing to their 401k’s with the DOW at 28k. They are buying high, with the hope that it will go higher. If growth now costs us growth in the future, then anyone who is currently contributing to a retirement plan is really being scammed, and they will not have nearly what they think they should have when they need it. > [@](#): > > It’s not necessarily the length of the economic run that concerns me – it’s entirely possible for Obama to hand over the keys and for Trump to keep the economic engine going. But what concerns me is the emphasis on growth over stability, which is a traditional Republican economic philosophy. It’s like a doctor who’s only measure of a patient’s health is the heart rate, and who considers a higher heart rate to be better than a lower one. To that doctor, meth and cocaine are the most healthy drugs. > [@](#): > > It usually ends in bank failures, corporate liquidation, market crashes, lost jobs, drug epidemics, true dat and perhaps a few CEOs making a perp walk. [/QUOTE] perhaps a few, but not for financial improprieties, but due to disloyalty to the president. The owners of Massey energy will get no bid govt contracts, and the owners of the Washington Post will get prison time. ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [February 1, 2020, 9:08pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/54 "2020-02-01T21:08:12Z")
> [@k9bfriender](#): > > Yes, the economy is in a bubble that is financed by federal debt. That trillion dollar give away in the tax bill translated into hundreds of billions of dollars of growth in the valuation of companies. Executives paid themselves more, and more money was divested to stockholders. All this money worked to stimulate the economy. Unfortunately, this stimulus if very inefficient and certainly not sustainable. > > If you think that the current growth is real, can you point to the factor that allows us to have a longer period of growth than any other in a modern economy that is not based on increasing deficit spending? I agree that the tax cut was inefficient, and I wouldn’t have done it at all. But what is the bubble? I don’t see a bubble forming. The housing bubble was foreseen by many - not all - economists. I think the stock bubble in 2000 was small compared to the housing bubble, but some saw it. What is today’s bubble? What class of assets is over-valued, such that when it pops, the economy will go into a recession? ---
**Author:** ![survinga](https://avatars.discourse-cdn.com/v4/letter/s/cab0a1/32.png) [@survinga](https://boards.straightdope.com/u/survinga)\ **Post date:** [February 1, 2020, 9:10pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/55 "2020-02-01T21:10:51Z")
> [@asahi](#): > > I’m not necessarily referring to federal debt here; I’m referring to political manipulation of the federal reserve to hold interest rates below where they should be. If anything, the Fed raised rates too quick between 2015-2018. There was very little inflationary pressure forming in the economy, and they were raising rates to head off something that wasn’t occurring. It was actually right of them to stop raising rates, and even to lower them slightly. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [February 1, 2020, 9:20pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/56 "2020-02-01T21:20:32Z")
> [@survinga](#): > > …and they were raising rates to head off something that wasn’t occurring. That’s what “heading off” means, right; trying to prevent something before it happens? ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [February 1, 2020, 9:41pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/57 "2020-02-01T21:41:19Z")
> [@survinga](#): > > I agree that the tax cut was inefficient, and I wouldn’t have done it at all. But what is the bubble? I don’t see a bubble forming. The housing bubble was foreseen by many - not all - economists. I think the stock bubble in 2000 was small compared to the housing bubble, but some saw it. What is today’s bubble? What class of assets is over-valued, such that when it pops, the economy will go into a recession? Are you asking what is overvalued? Pretty much everything. I remember back in the late 90’s investors were saying that P/E ratio’s didn’t matter anymore, then we had a market correction. Well, P/E values are getting to be a bit ridiculous as it is, and the earning that they are showing are being propped up by unsustainable high consumer spending that is financed by the tax cuts and by going into debt. With household incomes not rising, they will not be able to continue to finance the debt that they go into to finance their lifestyle. The slightest wavering in consumer confidence, the slightest pullback in consumer spending at this point will cause waves that will cause a pretty severe correction. Keep in mind that this is not a bad thing in and of itself, it is a “correction”, it is bringing the market back into balance. However, it is a bad thing for the people that lose money in it, and it can be made a much worse thing if the government reacts poorly to it, especially if they do more of the same of tax cuts and cutting interest. If you are asking me what specifically will be the thing that pops the bubble and when, I will admit that I do not know, and if I did know I wouldn’t tell you as I would instead be investing in some short selling. If we tread the next few years carefully, we can emerge fiscally sound and sustainable. If we keep doing what we are doing, at some point, the house of cards will come crashing down upon us all. > [@Robot\_Arm](#): > > That’s what “heading off” means, right; trying to prevent something before it happens? Just like vaccines. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [February 1, 2020, 9:53pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/58 "2020-02-01T21:53:56Z")
> [@survinga](#): > > I agree that the tax cut was inefficient, and I wouldn’t have done it at all. But what is the bubble? I don’t see a bubble forming. The housing bubble was foreseen by many - not all - economists. I think the stock bubble in 2000 was small compared to the housing bubble, but some saw it. What is today’s bubble? What class of assets is over-valued, such that when it pops, the economy will go into a recession? Agreed. We can disagree about the tax cut, but it seems like what the poster you were responding to complaining that this growth was somehow illegitimate because it all it did was cause companies to spend more of their own money, causing record low unemployment, and allowing consumers to spend more money seems like exactly what economic growth is. The accusation seems to be that this can’t last forever and when the economy slows down, it will slow down. You could say that about any time of prosperity. I’m with you. What bubble is out there? House prices seem to be increasing a little more than I would be comfortable with and some of those lending practices that were present in 2006-2008 seem to be creeping back. Of course if there was something unknown like the dotcom bubble was out there we wouldn’t know, but again, I don’t think you can say that the surging economy is a fig leaf because something unknown might happen. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [February 1, 2020, 10:23pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/59 "2020-02-01T22:23:47Z")
> [@UltraVires](#): > > Agreed. We can disagree about the tax cut, but it seems like what the poster you were responding to complaining that this growth was somehow illegitimate because it all it did was cause companies to spend more of their own money, causing record low unemployment, and allowing consumers to spend more money seems like exactly what economic growth is. Odd that you would take it to seem that way, when that is not remotely like what I said. Also, consumer wages are not going up. Unemployment is down, but not for jobs that pay a living wage. By “allow consumers to spend more money” you are meaning allowing them to go further into debt in order to fund stock buy backs and dividends. > [@](#): > > The accusation seems to be that this can’t last forever and when the economy slows down, it will slow down. You could say that about any time of prosperity. No, the observation is that when it slows down, as it always has, it will cause waves that will cause far more damage than if the economy were not being goosed with economic stimulus when it is already going strong. And that was for two reasons. One, the bigger the bubble, the more harm it does when it bursts. And two, if we are spending the deficit to stimulate an already growing economy and holding down interest rates, then what tools do we have left when we need them to stimulate the economy when it is in a recession? > [@](#): > > I’m with you. What bubble is out there? House prices seem to be increasing a little more than I would be comfortable with and some of those lending practices that were present in 2006-2008 seem to be creeping back. Of course if there was something unknown like the dotcom bubble was out there we wouldn’t know, but again, I don’t think you can say that the surging economy is a fig leaf because something unknown might happen. Once again, please make some sort of cite where I remotely called the surging economy a fig leaf. Just because you choose to make illegitimate and stupid interpretations doesn’t mean that they bear any resemblance to what I actually said. It’s not something unknown might happen. It is that something that has historically happened throughout the history of economies will happen. It is not unknown, other than the exact timing and nature of it. Can you explain why you think that we will never encounter another recession or correction? If not, then it’s not exactly as you described, an unknown that might happen, now is it? Do you understand now, or are there any other parts of this very simple lesson in economics that you will choose to misunderstand? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [February 1, 2020, 10:50pm UTC](https://boards.straightdope.com/t/how-important-is-the-debt/846992/60 "2020-02-01T22:50:35Z")
> [@k9bfriender](#): > > Odd that you would take it to seem that way, when that is not remotely like what I said. > > Also, consumer wages are not going up. Unemployment is down, but not for jobs that pay a living wage. By “allow consumers to spend more money” you are meaning allowing them to go further into debt in order to fund stock buy backs and dividends. > No, the observation is that when it slows down, as it always has, it will cause waves that will cause far more damage than if the economy were not being goosed with economic stimulus when it is already going strong. > > And that was for two reasons. One, the bigger the bubble, the more harm it does when it bursts. And two, if we are spending the deficit to stimulate an already growing economy and holding down interest rates, then what tools do we have left when we need them to stimulate the economy when it is in a recession? > Once again, please make some sort of cite where I remotely called the surging economy a fig leaf. Just because you choose to make illegitimate and stupid interpretations doesn’t mean that they bear any resemblance to what I actually said. > > It’s not something unknown might happen. It is that something that has historically happened throughout the history of economies will happen. It is not unknown, other than the exact timing and nature of it. Can you explain why you think that we will never encounter another recession or correction? If not, then it’s not exactly as you described, an unknown that might happen, now is it? > > Do you understand now, or are there any other parts of this very simple lesson in economics that you will choose to misunderstand? The problem with your entire absurd argument is that simply having a lower tax rate is “goosing” the economy as if that is a parlor trick which is causing the current prosperity. Lower tax rates are not an “economic stimulus” like a one time injection of money into the economy or a makework program. It is simply freedom to keep more of what you earn. Did we “goose” the economy for the 130 years prior to the imposition of any income tax at all? Why is a 39.6% tax rate on the rich the sweet spot whereby anything less than that is a goosing? Taxes are always a deadweight loss and lower taxes are acting to stimulate the economy exactly as it should: by allowing people to engage in economic activity free of this loss. Sure, we could debate whether we would be better off paying down the deficit with that money instead of having tax cuts and a nice economy. We could debate on having a good economy and harsh cuts to social programs. But nothing you claim or the result of our debate about taxes v. spending stands for anything other than the ordinary proposition that all good economies must be followed by a slowing down or recession. None of that is an indictment on the current economy. And even if these are burger flipping jobs, for which you have provided no cite and is a common refrain whenever a Republican is president, that is still better than no jobs as it takes at least a part of these peoples’ needs off of the burden of government and gives them a partial ability to buy things which stimulates the economy. Point to any period of prosperity and I could make the same arguments you are making. I’m not saying you are wrong, but that you are not really saying anything. [Previous page](https://boards.straightdope.com/t/how-important-is-the-debt/846992.md?page=2) [Next page](https://boards.straightdope.com/t/how-important-is-the-debt/846992.md?page=4)