Smasharoo wrote:
Debt and deficit at the macroeconomic level are different only because there are more methods to manage them. You can run deficits every single year but still not ever "run out of money". However, that does not mean that high levels of debt are harmless. You still want to keep total debt levels manageable, or you will suffer negative economic effects.
I agree, spending money on invading Iraq was a catastrophic failure in judgment.
Rhetoric aside, we didn't suffer any negative economic effects resulting from the cost of our military operations in Iraq. I showed you the raw data proving this the last time you asked for it.
Quote:
Seriously, there's a simple straightforward explanation as to why debt now is structurally irrelevant in all but the most extreme scenarios.
Debt in excess of 60% of GDP and growing would seem to qualify as an "extreme scenario", wouldn't you agree?
Quote:
Are you honestly trying to suggest that our current debt level isn't a major reason for why our employment rate is still hovering over 9%?
I'm sorry, what? US debt causes unemployment??
Yes. Do I need to draw a map for you in crayon?
Quote:
Yes, I'm suggesting our current debt level isn't a major reason for why our employment rate is over 9%. I'm geniuenly intrigued by any explanation correlating the two in any way.
Apparently, I do. I'll go really slow so you can understand:
High debt must be paid in some way. You either have to print money and thus increase inflation, or raise taxes, or dramatically decrease spending. When there are Democrats in control of both houses of congress and the white house, it's a good bet that numbers 1 and 2 will happen and *not* much of number 3. Absent the other effects of inflation, both of those first two options produce negative effects for private businesses and their investors.
As long as those options are on the table, less money will be invested into things which result in employment. Ergo, we wont create new jobs quickly enough to keep unemployment at a relatively low rate. What's funny is that the folks on your side know this. They talk about it all the time, blaming "big business" for failing to invest in ways which create jobs. But they don't manage to see how the very policies they support are the reason for this.
And that's how a high debt level causes unemployment. Maybe we should approach it from the other direction: What the hell do you think causes
employment in the first place? Answer that question honestly, and you should be able to see how the current situation reduces the rate at which new jobs are created.