# Is US Federal debt sustainable? **URL:** \ **Category:** Great Debates\ **Created:** [January 27, 2015, 2:44pm UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001 "2015-01-27T14:44:54Z")\ **Posts on this page:** 20\ **Page:** 8
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [February 20, 2015, 5:53am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/141 "2015-02-20T05:53:26Z")
> [@Trinopus](#): > > I’d like to see some serious data on this, as I can’t believe that IBM or Ford didn’t borrow money to finance business expansion, back in the 1950’s. Or the 1920’s. Ford had, in 1919, borrowed some seventy-five million dollars (figures vary in differing sources) to purchase the stock of the other holders in the company. [http://www.mtfca.com/encyclo/1921-25H.htm](http://www.mtfca.com/encyclo/1921-25H.htm) ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [February 20, 2015, 6:16am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/142 "2015-02-20T06:16:36Z")
The 1956 obituary of IBM’s Thomas J. Watson Sr. > [@](#): > > One of his proudest “selling” jobs was the negotiation of a $40,000 loan, without the customary collateral, from the Guaranty Trust Company of New York–of which he later became a director. > > Most of the borrowed funds were used for the establishment of an engineering laboratory for the development of new machines. > > [NY Times](http://www.nytimes.com/learning/general/onthisday/bday/0217.html) Had to have been in the '40s or so based on the timeline in the Obituary. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [February 20, 2015, 6:18am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/143 "2015-02-20T06:18:53Z")
> [@SenorBeef](#): > > This isn’t a useful contribution to this thread. At best it’s an ad hominem by proxy, and it’s an inappropriate proxy since you’re pulling Ron Paul out of left field. He’s not the only person to advocate for a gold standard, and he’s not otherwise relevant to the discussion at all. You do your side a disservice by your participation. FTR: Not the left field. “End the Fed”, referenced upthread by Joe, was written by Ron Paul. Sourcing is appropriate and helpful. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [February 20, 2015, 6:39am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/144 "2015-02-20T06:39:58Z")
An excerpt from a book _America: What Went Wrong_: > [@](#): > > During the 1950s, when manufacturing jobs were created at a record pace, companies invested $3 billion in new manufacturing plants and equipment for every $1 billion paid out in interest. > > By the 1980s, that pattern had been reversed: Corporations paid out $1.6 billion in interest for every $1 billion invested in manufacturing plants and equipment. > > Similarly, during the 1950s, for every $1 billion that corporations paid out in interest on borrowed money, they allocated $710 million for research and development. > > By the 1980s, corporations spent only $220 million on research and development for every $1 billion in interest payments. > > [Philadelphia Enquirer](http://www.barlettandsteele.com/journalism/inq_wwr_2.php) This book was published over two decades ago but it seems to have seen the writing on the wall even then with regard to income inequality and how business models were changing - and not necessarily for the better. As you can see from the passage, businesses always borrowed money, even in the '50s. They just do it more now, for better or worse. ---
**Author:** ![SenorBeef](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senorbeef/32/2220_2.png) [@SenorBeef](https://boards.straightdope.com/u/SenorBeef)\ **Post date:** [February 20, 2015, 6:50am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/145 "2015-02-20T06:50:34Z")
> [@Measure\_for\_Measure](#): > > FTR: Not the left field. “End the Fed”, referenced upthread by Joe, was written by Ron Paul. Sourcing is appropriate and helpful. My bad. I thought I’d seen everything in the thread but I missed that. Still, browbeating someone over and over and telling them they’re an idiot (absent good info/argument) is not a good introduction to someone posting in GQ. Plenty of posts actually try to make a case that’s informative. Some not so much. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [February 20, 2015, 6:55am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/146 "2015-02-20T06:55:31Z")
> [@SenorBeef](#): > > Still, browbeating someone over and over and telling them they’re an idiot Can you quote me calling the poster idiot? No? Then you will retract that I was “telling them they’re an idiot” unless you have reason to believe the poster is actually Ron Paul, a public personality who I encourage everyone to call an idiot (provided he doesn’t post here). ---
**Author:** ![SenorBeef](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senorbeef/32/2220_2.png) [@SenorBeef](https://boards.straightdope.com/u/SenorBeef)\ **Post date:** [February 20, 2015, 7:16am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/147 "2015-02-20T07:16:39Z")
> [@John\_Stamos\_Left\_Ear](#): > > Can you quote me calling the poster idiot? No? Then you will retract that I was “telling them they’re an idiot” unless you have reason to believe the poster is actually Ron Paul, a public personality who I encourage everyone to call an idiot (provided he doesn’t post here). Oh please. “I never said he was stupid, I just said that everything he believes is stupid because his stupid ideas were implanted in him by stupid people clearly because there’s nothing but stupid there!” is weaseling. Here are your first few posts in the thread. None of them added anything to the discussion. They were simply browbeating and throwing around insults. Just because you’re probably right doesn’t mean you get to make poor arguments and lower the level of discourse of the discussion. It hurts your side more than helps. > [@John\_Stamos\_Left\_Ear](#): > > Ron Paul is an idiot. That is all. > [@John\_Stamos\_Left\_Ear](#): > > And I’ll bet that he feels differently about the person who put all these dumb ideas in his head. > [@John\_Stamos\_Left\_Ear](#): > > I can call Ron Paul an idiot because he’s a public figure. Oh, and also because I looked at the garbage he says and applied critical thinking and saw that he’s an idiot. > [@John\_Stamos\_Left\_Ear](#): > > Whomever else gave you these ideas was dumb. And so is Ron Paul who also has them. You never say “here’s why the gold standard is dumb” or “here’s some data to show you why your arguments are flawed”, it’s just brow beating and ad hominems by proxy. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [February 20, 2015, 7:25am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/148 "2015-02-20T07:25:29Z")
I repeat: > [@John\_Stamos\_Left\_Ear](#): > > Can you quote me calling the poster idiot? No? Then you will retract that I was “telling them they’re an idiot.” So retract, please. You accused me of something you cannot back up. Which makes you nobody to tell me or anyone what constitutes a “poor argument,” incidentally. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 21, 2015, 12:00am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/149 "2015-02-21T00:00:45Z")
> [@septimus](#): > > The way that private entrepreneurs set interest rates and extend credit, in effect creating paper money, does seem peculiar. “Peculiar”? Interesting way to spell “fraudulent”. I’m interested in your opinion, why do you think they should have this privilege of creating money? > [@](#): > > But this has been a model at least since the Lombard bankers before the voyages of Columbus, and has dominated world finance since. The length of time a fraud has been perpetrated does not make it correct. > [@](#): > > _It has the advantage that political authorities cannot degrade money, e.g. with printing presses._ And the disadvantage that the degradation of money is in the hands of the bankers. Hence the need to have a currency immune to degradation by bankers or politicians. > [@](#): > > Libertarians will admire this use of free market principles. How is it a “free market” when one self-appointed class creates money out of thin air? That sounds like a very manipulated market to me. > [@](#): > > With the gold standard discarded almost a century ago, central banks have been created to provide a “monetary base,” but of course this is readily understood by the cognizant. Such government/bank cooperation combines the benefits of both free-market credit and regulation. Well perhaps if your knowledge of monetary history was a little better, you might have a leg to stand on. As far as I know, the gold standard wasn’t abandoned until Nixon closed the gold window in 1971, which is only 44 years ago, not almost a century ago. I might be generous and allow that FDR making the holding of gold by private citizens a crime was the beginning of the removal of the gold standard, and grant eighty some years is almost a century ago but the fact remains the dollar was convertible into silver up until 1964 and and it was convertible into gold internationally until 1971. But then again I might not be. Government/bank cooperation? That’s what you call it? I call it bank-owned government. And why don’t we look at the results since this “cooperation” has been unshackled from the burden of convertibility into something of real value, like precious metals? According to the [BLS](http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.65&year1=1970&year2=2014), the dollar has lost about 85% of its value since 1970. Far from it being the Fed’s job to “fight” inflation, the Fed actually generates inflation and the loss of value of the currency. > [@](#): > > A fair return to responsible entrepreneurs is fine. That regulations were lacking is shown by crises in the 1980’s and 2008, but I’d lay the blame for that on Congress and Executive branch, rather than on the central bank itself. The banking establishment gets the laws and regulations that they want. So yeah I’d blame the banks, after all they own all the politicians. > [@](#): > > My take on this issue is different from yours, **Joe**. That’s why I asked you the question. Answering my own question, I’ve read a variety of economics scholars. I’d love Friedman’s _Monetary History_ as a birthday present (but, since my yet-to-read list is very long, would prefer to have just an on-line URL for excerpts). But I’m certainly no expert. My last formal course in economics was in the 1960’s. :eek: I do read on relevant topics, including even [an article by Alain Pilote, probable crackpot](http://www.michaeljournal.org/plenty49.htm%5B/URL). (I’d ask SDMB experts on U.S. monetary history to comment whether that article, _ignoring_ its obvious spin, contains _factual errors_.) > > So is Paul a mentor or not? Are you willing to answer my question? No actually I found out about Ron Paul well after I was introduced to the fraudulent nature of fractional reserve banking. If you really want to know, I always thought there was something wrong with economics after I took a couple of courses in the 70s. What opened my eyes was a combination of The Creature from Jekyll Island and The Money Masters around the turn-of-the-century. I really have a hard time understanding why anyone would support such a system, unless of course they were bankers. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 21, 2015, 12:18am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/150 "2015-02-21T00:18:08Z")
> [@foolsguinea](#): > > _Central_ banks, yes. The point of fractional reserve banking is to stop small banks from doing that and getting themselves in trouble. They have to keep a _fraction_ in _reserve._ My question is why wasn’t fractional reserve banking outlawed as the scam it is, rather than institutionalized in “regulations”. If the scam causes so much trouble, why do we allow it to continue? > [@](#): > > There was inflation well before then, as a cursory study of numismatics would indicate. Maybe not as much in the United States, which kept trying earnestly to get back to “hard money” even at the cost of frequent depressions.Well, yes, that is bad. The depressions were caused by banks going under, for the most part, either here or abroad… And banks go under because they loan out more money than they really have. How is this a system that should be regulated instead of abolished? > [@](#): > > The Long Depression started in the USA and spread through the international economy. Same can fairly be said of the present depression. Neither the economy nor the global market for money really stops at the border–maybe for a Marxist state it could. > So you “invest” (that is, lend businesses money) and presumably expect returns, but decry banks (which pool money from many investors) when they do the same? :dubious: No, I trade stocks. I’m not lending anyone anything, I’m buying a piece of the business and I expect dividends and possibly capital appreciation, not interest. Please please don’t make me explain to you that banks do no such thing. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 21, 2015, 12:24am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/151 "2015-02-21T00:24:18Z")
> [@John\_Stamos\_Left\_Ear](#): > > So your anti-Fed, allusions to a standard - say, maybe a Gold Standard - just happen to coincide with Ron Paul. But you don’t like the guy. Okay. > > Whomever else gave you these ideas was dumb. And so is Ron Paul who also has them. When did I say I was in favor of a gold standard? Matter of fact I prefer silver among the precious metals. So your entire argument for the current fractional reserve privately owned central bank inflation machine is that Ron Paul and who ever else I listen to is dumb? That’s not very convincing. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 21, 2015, 12:30am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/152 "2015-02-21T00:30:37Z")
> [@Deeg](#): > > But it **does** improve, which pretty much invalidates your whole argument. The Great Depression was an improvement? The government constantly bailing out too big to fail banks is an improvement? 600% inflation since 1970 is an improvement? Wow must have been really, really bad in the past! The only thing that’s improved is that the rich bankers have become more skilled in their fleecing of the flock. ---
**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 21, 2015, 3:48am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/153 "2015-02-21T03:48:06Z")
> [@JoeTheBartender](#): > > “Peculiar”? Interesting way to spell “fraudulent”. I’m interested in your opinion, why do you think they should have this privilege of creating money? Let’s say you and I exchange IOU’s; “I Owe Joe (or his assignee) $10, signed Septimus” and likewise the other way. _$20 of paper money has been created!_ Stripped of superfluous complexity, that is the mechanism by which banks create money. The difference is whether a given person is more likely to accept a Citibank Debit Card than a piece of paper signed Joe the Bartender. **Government regulation was developed to reduce the damage fraudulent bankers could do, _not_ to encourage fraud.** > [@JoeTheBartender](#): > > And the disadvantage that the degradation of money is in the hands of the bankers. Hence the need to have a currency immune to degradation by bankers or politicians. So you want Silver == Money? Unlike many Dopers I won’t reject the idea out of hand, but be aware that you introduce more problems than you solve. Silver’s price isn’t stable. You’ll still end up with some form of “fractional-reserve money,” just based on a different monetary base. > [@JoeTheBartender](#): > > I call not putting your reserves in short term paper for six months and then borrowing your cost of goods that interest a bad business practice. At one point you disapprove of companies selling debt paper, but now you want companes to buy such paper. Inconsistent? > [@JoeTheBartender](#): > > Well perhaps if your knowledge of monetary history was a little better, you might have a leg to stand on. As far as I know, the gold standard wasn’t abandoned until Nixon closed the gold window in 1971, Basing your case on a half-understood nitpick won’t get you credibility. > [@JoeTheBartender](#): > > the dollar has lost about 85% of its value since 1970. Far from it being the Fed’s job to “fight” inflation, the Fed actually generates inflation and the loss of value of the currency. Phrases like “lost 85% of its value” is a tipoff that the writer is fundamentally lacking relevant knowledge of monetary policy. To start with the trivial, inflation per year is a useful parameter; compounding it over decades is an ignorant scare tactic. The Fed has done an excellent job of fighting inflation, though deliberately setting a target greater than zero. And it has other proiorities. If one dollar loses 3% of its value every year, after 150 years, only a penny’s value is left. But that’s not economics – that’s trivial arithmetic intended to frighten children. The dollar is a measuring-rod to assist in the trading of labor for food, and fabrics for iron ore, etc. A currency with _predictable_ inflation rate is as useful as a precious-metal currency, and much superior in many ways. Unless you’re one of the weirdos who thinks that because the dollar lost 85% of its value, American people were robbed of 85% of their wealth, I recommend you consider inflation more carefully, and seek an understanding not based on useless hyperbole. Oh, BTW. At any point in U.S. history, selling gold and using the proceeds to buy interest-bearing 10-year governments bonds, and rolling principlal and interest forward would … outperfom the gold in the ground … even ignoring the costs of bodyguard and vault to protect the gold. So will you answerr my question? Where do you learn this stuff? > [@JoeTheBartender](#): > > What opened my eyes was a combination of The Creature from Jekyll Island and The Money Masters around the turn-of-the-century. I’m not familiar with these economists. Links to some of their papers? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2015, 6:39am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/154 "2015-02-21T06:39:13Z")
> [@JoeTheBartender](#): > > Well that’s a personal opinion that I don’t share with you at all. Oh about 50 or 60 years ago, debt was something you avoided. Bullshit. Just over 60 years ago my father, like plenty of other people, went into debt to buy our house. It was not at all something he or anyone else avoided. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2015, 6:47am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/155 "2015-02-21T06:47:29Z")
> [@JoeTheBartender](#): > > Government/bank cooperation? That’s what you call it? I call it bank-owned government. And why don’t we look at the results since this “cooperation” has been unshackled from the burden of convertibility into something of real value, like precious metals? According to the [BLS](http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.65&year1=1970&year2=2014), the dollar has lost about 85% of its value since 1970. Far from it being the Fed’s job to “fight” inflation, the Fed actually generates inflation and the loss of value of the currency. Things are about three times more expensive, in terms of constant dollars, than when I got my degree. But people we hire today get three times what I did. Big deal. And it is not like we are that much better off with our low inflation than we were back in 1982 with high inflation. In some ways we are worse off. Giving out raises when the average raise was 10% was great - much better than when the average raise was 2%. Gold is very valuable in dentistry, in building electronics, and in creating beautiful things. But it has no intrinsic value. None - or no more than copper, silver and silicon have. Our primitive ancestors saw a nugget, said “oh, shiny” and we’ve suffered gold fever ever since. Time for gold bugs to get out of the Stone Age. The value of currency today is controlled by market (with some government intervention.) Why would someone who claims to be a capitalist not like this? ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [February 22, 2015, 4:39am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/156 "2015-02-22T04:39:37Z")
> [@JoeTheBartender](#): > > The Great Depression was an improvement? The government constantly bailing out too big to fail banks is an improvement? 600% inflation since 1970 is an improvement? > > Wow must have been really, really bad in the past! It was. The Great Depression happened while we were on the gold standard. Per capita income began to raise almost immediately when the US moved away from the gold standard and we haven’t had anything as bad as the GD since. Sounds like moving off the gold standard has helped. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 25, 2015, 3:19am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/157 "2015-02-25T03:19:13Z")
> [@Measure\_for\_Measure](#): > > If you look further in the Bank of England article, they have a lengthy discussion (with graphs) covering reserves. The paper is not an attack on fractional reserve banking, as far as I can tell based on a skim. It’s an argument for adjusting the way textbooks describe things. It certainly isn’t the final word. [In fact, I’m surprised I couldn’t find a reference to the alleged obsolescence of reserve requirements: maybe I didn’t look hard enough.] No it’s not an attack, they seem to think it’s fine. I just posted it to show that the banks create money out of thin air and they admit it.[The Fed’s website](http://www.federalreserve.gov/monetarypolicy/reservereq.htm#table1) is where I found a table of current reserve requirements. > [@](#): > > Sheesh Joe, you’re calling the for abolition of a practice that has existed for hundreds of years, spans all the countries of the world and has been considered and rejected by a variety of thinkers. Done carefully, that can be a fringe argument. Work hard enough and you might bring it to the level of minority opinion: we’re not there yet. But usually it’s in the realm of cranks. “Fringe” in my nomenclature would be something to aspire to. You need to question your information sources. Paper money existed between 1790 and 1860. It was issued by banks. Of course you mean bank notes. Promises to pay money, not money itself. And of course, since… > [@](#): > > A _fraction_ of the value of the notes issued were backed by gold. … If more than just a few of their customers wanted their money (you know, gold), that bank would have to close their doors, causing one of those “panics”. I keep wondering how otherwise intelligent people can support a system that allows banks to daily commit fraud. > [@](#): > > Merchants would consult tables to put varying discounts on the value of different banks: a dollar bill wasn’t worth a dollar. No but a SILVER dollar was worth a dollar, by definition. I have many silver dollars in my collection. Each of them, just in silver content, worth about 14 of those Federal Reserve notes. Do your bankers notes hold their value as well? No I didn’t think so. > [@](#): > > Scammers would try to pass off bills from shoddy banks in the hinterlands with mixed success. Commerce was awkward, but dodgy bills still beat barter. That is all really hilarious statement! You’re calling the people who got stuck with notes (not bills, notes. There is a big difference) from banks who overextended their lending the scammers, when the banks of the real scammers! What you call scammers, I call suckers. Or marks as in the mark in a confidence game. > [@](#): > > Again: question your info sources. Any published author who quotes Article I, section 8 without a discussion of early 1800s private money creation is either a crackpot or a charlatan. Seriously: you can’t study that period without running into these sorts of facts. So you have to consider the possibility that your info sources are trying to pull the wool over your eyes. I’m fully aware of the shenanigans that banks have pulled throughout the years, right down to the buckboard carrying the barrel full of nails with a layer of gold coins on the top just ahead of the bank examiner going to each bank. > [@](#): > > That said, I and a lot of people will agree with you that 2007-2008 was a grand clusterf&$%. Yeah who caused it? bankers loaning out money to people who could never afford to pay it back and then bundling them and selling them to unsuspecting investors meanwhile betting on the housing market collapse? How can you possibly support these cretins? ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 25, 2015, 3:32am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/158 "2015-02-25T03:32:42Z")
> [@Measure\_for\_Measure](#): > > Huh, so has Apple for the same reasons. > > At any rate, you can go to google finance and look at the financials of any major corporation. Exxon has $5.0 billion in cash and $11.6 in long term debt. Walmart has $6.7 billion in cash and $41.7 billion in long term debt. Debt is a fixture of American capitalism and heck worldwide capitalism. It would be intriguing to locate a major company that has avoided it altogether over its lifecycle. Okay partially take it back. If you arbitrage the difference between the interest rate you’re paying and the return you’re getting on that same money sure take on the debt. Of course this is mostly only available to very large amounts of money. You and me or a small businessman, not so much. ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 25, 2015, 3:36am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/159 "2015-02-25T03:36:16Z")
> [@John\_Stamos\_Left\_Ear](#): > > The Gold Standard is dumb no matter who advocates it. End stop. Okay you said Ron Paul is dumb, you said the gold standard is dumb. You have a contribution other than calling things dumb? ---
**Author:** ![JoeTheBartender](https://avatars.discourse-cdn.com/v4/letter/j/b5a626/32.png) [@JoeTheBartender](https://boards.straightdope.com/u/JoeTheBartender)\ **Post date:** [February 25, 2015, 3:43am UTC](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001/160 "2015-02-25T03:43:57Z")
> [@Measure\_for\_Measure](#): > > FTR: Not the left field. “End the Fed”, referenced upthread by Joe, was written by Ron Paul. Sourcing is appropriate and helpful. I call BS. I referenced that only AFTER he called Ron Paul dumb, and I said it was a lightweight treatment of the subject. No, Ron Paul is not my “mentor” and I could care less about him, or Rand. To me they’re just bought and paid for politicians. I consider it stupid that anyone would bring him up when I didn’t at all. Perhaps it indicates that some people think Paul is the alpha and omega of the anti-Fed movement. He isn’t. Perhaps those people should read some other things to get the idea of what money is supposed to be, and it’s not banker’s IOUs. Matter of fact, I think his campaign to audit the Fed is ridiculous. We need to eliminate fractional reserve banking, nothing short of that will improve the situation for people who actually work and produce for a living. [Previous page](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001.md?page=7) [Next page](https://boards.straightdope.com/t/is-us-federal-debt-sustainable/711001.md?page=9)