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America borrows it's way out of a debt crisis.
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What it has done is provide a short term boost.
To provide robust growth, the amount of spending will have to keep on increasing...which obviously isn't sustainable.0 -
The kick start is unlikly to keep ongoing growth though. They will have to keep on borrowing and spending more..Graham_Devon wrote: »What it has done is provide a short term boost.
To provide robust growth, the amount of spending will have to keep on increasing...which obviously isn't sustainable.
And that's where we disagree.
You use deficit spending to kickstart the economy, and eventually the growth becomes self-sustaining.
Which is why the US will see it's deficit shrink to just 2% of GDP in 7 years, which is then effectively reducing the debt in real terms every year.
They don't need to keep on spending more and more once growth returns.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »And that's where we disagree.
You use deficit spending to kickstart the economy, and eventually the growth becomes self-sustaining.
Which is why the US will see it's deficit shrink to just 2% of GDP in 7 years, which is then effectively reducing the debt in real terms every year.
They don't need to keep on spending more and more once growth returns.
So you'll not only need organic growth, but you will need the organic growth to outpace and therefore replace any stimulus spending.
Seems like a lot of growth is required.0 -
It does appear that an electorate can get used to government borrowing and spending. What in effect happens is they see their standard of living increasing without having to work any harder or smarter. It is then very difficult for a democratic government to take that away. Hence ever increasing borrowing in much of the western world over the last few decades.0
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Graham_Devon wrote: »So you'll not only need organic growth, but you will need the organic growth to outpace and therefore replace any stimulus spending.
Seems like a lot of growth is required.
It is.
And they're achieving it.
Proving that you can indeed borrow your way out of a recession, and then have growth get you out of a debt crisis.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »It is.
And they're achieving it.
Proving that you can indeed borrow your way out of a recession, and then have growth get you out of a debt crisis.
Achieving it?
Not sure you have seen their debt levels?0 -
Graham_Devon wrote: »Achieving it?
Yep.
Achieving it.the US budget deficit will shrink to 4% of GDP this year.
The slide from 2009's 10.1% budget shortfall is one in the eye for the Tea party and any other advocate of "contractionary expansion".
Worse for the fans of austerity, forecasts published by the US congressional budget office expect the deficit to fall to 2.1% of GDP by 2015 as tax revenues soar.
They are on track to hit those numbers.
We are nowhere near hitting our original goals, nor even the revised and lowered goals after it became clear we wouldn't hit the original ones.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
I said debt, not deficit.0
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Watched A place in the Sun Home or Away whilst having tea tonight -sad I know.
They were citing property down 60% in Florida perhaps that is what we need to??"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
HAMISH_MCTAVISH wrote: »...
But the key factor is still to increase spending in real terms.
But not borrowing, apparently.0
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