Is deficit spending sustainable?

[Rune]

@emacknight

One thing that I think makes the US unique is that it borrows in its own currency. Debt crisis in other countries is usually the double whammy that happens when deficit spending causes their currency to fall, making the debt appear larger.

Are there any nations, except very small ones without their own currency, which take up loans in other currencies than of its own? Although some times private individuals of a country will speculate in taking up loans in the currency of another country. One thing that makes the US debt worse than the debt of many other debtor nations, like Japan and Germany, is that the debt is coupled with trade deficit. Supposedly meaning that a lot of the debt is now held by non-US citizens, so that not only will the repayment be money send out of the country, so will the hundreds of billions of dollars of annual interest. Money I’m sure could have been well-used inside the USA for schools, infrastructure projects, etc.

[Dick_Dastardly]

Some reading for anybody worrying about debt levels:

http://krugman.blogs.nytimes.com/2009/08/28/the-burden-of-debt/

http://krugman.blogs.nytimes.com/2011/05/24/debt-arithmetic-wonkish/

[Chronos]

Quoth Derek Potter:

That’s why the outlook for America’s credit rating was called “negative” recently: a wake-up call that no matter what the nice man in charge may have read into Keynes, the fact is you can’t spend your way out of trouble if you have no prospect of future income.

So let’s make sure we have a prospect of future income, maybe via tax rates like those of Reagan or Eisenhower.