Dear Editor:
TIME magazine has a big scare story about the national debt in a current issue. TIME tells us every man, woman and child would have to pay $42,998.12 to eradicate the debt. This is the kind of lunacy that so many News Tribune letter writers worry about weekly.
Imagine, if you will, borrowing on a car loan. But what if the loan company then demanded you pay off the loan the week after you secure the loan. Insane. They really did not give you a loan plus they made almost nothing servicing the loan. The U.S. government finances its debt by issuing bonds and treasury notes. Investors buy these products expecting to get a secure return. Some are sold to foreign countries like China. Most of the debt is held by American institutions and domestic sources. The TIME article pretends an immediate recall of all U.S. debt.
Ironically most debt worriers idolize the wealthy. Wealthy people in America have lots of debt. They let other people’s money work for them. They live in multi-million dollar homes that are financed by debt. Why? Partially because of inflation which is a natural phenomenon in most growing economies. A dollar paid back in the future is worth less. There are interesting loan calculators in Quicken Finance and online that will show you the value of a loan and money over time.
The United States is not a business enterprise. Considering whether it is solvent or not is not even relevant. Libertarians influenced by the likes of Charles Koch deceitfully want us to worry about government solvency. A business is not gauged solely on its debt. Apple has a debt of $45 billion but has assets of $150 billion. The assets of America’s government exceed any current debt. America is far from broke despite repeated scare tactics of anarchists who hate all governments.
Since the beginning of the great recession in 2008 America’s interest rates have remained exceedingly low. Our government debt instruments presently pay peanuts on the debt. The world economy is such that there is no clear picture of when this might change. Japan has been in such a situation for almost two decades. Conservative obstruction has made this a lost opportunity. America could be building infrastructure and creating jobs with cheap money.
It seems clear to me America’s conservative owners (our richest 200 families) do not care about prosperity for all.
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