http://www.cbo.gov/ftpdocs/116xx/doc11659/07-27_Debt_FiscalCrisis_Brief.pdf

Will post highlights when I have time. I'm printing it out to read after supper.

I skimmed that paper and it's garbage, especially the comparisons to Argentina, Ireland and Greece. Anyone who tells you that a country that is (a) the most powerful in the world, (b) the country whose debt the rest of the world relies on to fuel their GDP, (c) the country whose currency is the most secure and who can destabilize the world (and has) at the drop of a hat to maintain that advantage, (d) a country that still has the highest per capita GDP among the developed world and (e) that has the largest GDP in the world (f) that borrows only in its own currency and (g) that is only borrowing heavily right now because the world wants to lend to them at virtually zero interest rates -- someone who tells you that such a country needs to use places like Greece and Ireland as a model with which to predict its future is a damn f'ing moron. That's an idiotic analogy. The rest of the paper's reasoning is based on the ridiculously circular "government crowding out private is bad because government is bad and private is good" argument. There are persuasive arguments against government debt but that facile paper had none of them. Why are CBO employees trying to play academics any way? If they were good academics, those capable of such debates, they wouldn't be working for the CBO. If they want to publish their opinion they should submit it to a proper journal, where the editor can rape it backwards and forwards thus saving people like me the 20 minutes I wasted reading their drivel. That piece of garbage paper wouldn't survive an editor from The People's College of Law Review and they are abusing the positions by publishing it under the CBO name.

You are an even bigger moron than I thought for linking that. Just stfu and don't post again, about anything.

What in that paper is interesting or damning? All the paper says is that deficits lead to debt, which can eventually lead to credit crises, which are bad. Hardly a brilliant insight.

The later that actions are taken to address persistent

budget imbalances, the more severe they will have to be.

CBO?s long-term projections for the federal budget

indicate that an immediate, permanent cut in spending

or increase in revenues equal to about 1 percent of GDP

(relative to the policies assumed for the extended-baseline

scenario) or about 5 percent of GDP (relative to the

policies assumed for the alternative fiscal scenario) would

prevent a net increase in the U.S. debt-to-GDP ratio over

the next 25 years. The latter would be equivalent to

roughly 20 percent of all of the government?s noninterest

spending this year. Actions taken later, particularly if

there was a fiscal crisis, would need to be significantly

greater to achieve that same objective.

----------------------

This brief was prepared by Jonathan Huntley of CBO?s

Macroeconomic Analysis Division. It and other

CBO publications are available at the agency?s Web site

(www.cbo.gov).

Douglas W. Elmendorf

Director

"The later that actions are taken to address persistent budget imbalances, the more severe they will have to be."

If that moronic statement were true, then no one should ever go into debt, because per se the immediate benefit of debt is certain to be less than the future sacrifices caused by the debt. In fact, the whole reason people go into debt, is because they believe the future sacrifices of paying off that debt, when balanced with the future benefits gained by having gone into debt, are LESS than the current sacrifice of not going into debt.

Do you see what a dumbass you are? You just made the argument that debt is PER SE bad. If we were to listen to you we'd have to kill the entire field of finance. Now if you want to say that this particular decision to go into debt is bad because its proceeds are not being used well then that's a possible argument, but to say that all debt necessarily requires futures sacrifices that outweigh its current benefits is something only an imbecile would say.

Yes. All the quoted excerpt says is that debt costs you more if you hold it longer.

That's not what it says. Your statement would not even worth saying because it's obvious. The quoted statement says the future sacrifice caused by going into debt now will be "more severe" than the sacrifice of not going into debt now (thus it would be better to not go into debt now). He's trying to scare you with "if you don't do what I say now something even worse will happen in the future" rhetoric.

What's the difference? That's just another way of saying the same thing. It's "more severe" if you're looking at it just in terms of the interest you'll pay, if everything else is held constant. Which is an obvious point that anyone who owns a credit card will know.

Because your interpretation looks only at the cost of debt, without balancing that cost with the future benefit gained by having gone into debt.

I agree with you. The CBO analysis is superficial. Their point is just that more debt will cost you more interest, which is obvious. They call that "more severe," and apparently assume that there's nothing more to it than that. They fail to ask why you might want to take out the debt in the first place, or what the benefits might be.