Think of it this way. Your parents borrow $10000 to throw a big party--one that you were not allowed to attend. After they die, their wills are read, bequeathing unto you $10000 in festivity debt, plus 50 years of interest. They never paid for the party, despite having such a great time at it (or so you assume, not having been there to judge).
Now you have a choice. You can try to maintain the postmortem reputations of your parents, by accepting their debt and making the payments. Or you can tell the creditors to FOAD.
For some reason, not only did our parents do that to us, but our grandparents did it to them, they chose to inherit the debt, and they still borrowed more money to throw their own party.
With government debt, the generational boundaries are not so clear, and the inheritance of debt smears together across thousands of deaths. But essentially, previous generations have been paying forward their debts instead of paying them back, to the point where almost everyone in the society is essentially born owing money to someone else. We already have so much inherited debt that we just can't afford to borrow the money for our own party. Also, we can't opt out.
That's not altogether untenable. I'd be willing to save up money and wait to throw my party until after the budget requirement is met. But it's hard to save anything when so much of your income is being sucked up by your elder generations' debt payments. And it is especially galling when people the same generation as you appear to be enjoying a party to which you were not invited.
That's the most persuasive rhetoric I know of in favor of repudiating national debt. To not do so is to reward the gross fiscal irresponsibility of our forebears.
The rhetoric against it, and also against mere default, states that it would devastate the ability of the current government to borrow more money. In other words, it would require the government to be more prudent and rational in regard to its budgeting. How is that a negative?
But that wasn't why the House Republicans threatened default. They were sending a big "F U" to the Obama administration, and playing a juvenile game of Chicken to do it. And they were only going to force some missed interest payments, without questioning the principal. Repudiating the debt would mean no more interest payments, and no repayment of principal, either. That would also, of course, cause a massive financial catastrophe that would preclude any partying for a long, long time, but at least it would temporarily stop the vicious cycle of kicking the snowball further down the mountain until it is so large that it starts killing any people unlucky enough to get in its way.
I'd love to have the national credit rating lowered. It would help stop the party-goers from running up another trillion that the non-invitees are ultimately tasked with paying off.
There's another way of looking at it. Debt can be an investment. Compare the rates of inflation vs. the interest rates on bonds. Please let me know if I'm wrong, but... isn't the government making money with them at this point?
As long as the principal on the bond cannot be repaid out of actual revenues, every bond you sell at a negative yield is one that may have to be refinanced at a positive yield later.
Now you have a choice. You can try to maintain the postmortem reputations of your parents, by accepting their debt and making the payments. Or you can tell the creditors to FOAD.
For some reason, not only did our parents do that to us, but our grandparents did it to them, they chose to inherit the debt, and they still borrowed more money to throw their own party.
With government debt, the generational boundaries are not so clear, and the inheritance of debt smears together across thousands of deaths. But essentially, previous generations have been paying forward their debts instead of paying them back, to the point where almost everyone in the society is essentially born owing money to someone else. We already have so much inherited debt that we just can't afford to borrow the money for our own party. Also, we can't opt out.
That's not altogether untenable. I'd be willing to save up money and wait to throw my party until after the budget requirement is met. But it's hard to save anything when so much of your income is being sucked up by your elder generations' debt payments. And it is especially galling when people the same generation as you appear to be enjoying a party to which you were not invited.
That's the most persuasive rhetoric I know of in favor of repudiating national debt. To not do so is to reward the gross fiscal irresponsibility of our forebears.
The rhetoric against it, and also against mere default, states that it would devastate the ability of the current government to borrow more money. In other words, it would require the government to be more prudent and rational in regard to its budgeting. How is that a negative?
But that wasn't why the House Republicans threatened default. They were sending a big "F U" to the Obama administration, and playing a juvenile game of Chicken to do it. And they were only going to force some missed interest payments, without questioning the principal. Repudiating the debt would mean no more interest payments, and no repayment of principal, either. That would also, of course, cause a massive financial catastrophe that would preclude any partying for a long, long time, but at least it would temporarily stop the vicious cycle of kicking the snowball further down the mountain until it is so large that it starts killing any people unlucky enough to get in its way.
I'd love to have the national credit rating lowered. It would help stop the party-goers from running up another trillion that the non-invitees are ultimately tasked with paying off.