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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (218155)	2/8/2005 6:09:32 PM
From: TimF	Read Replies (2) \| Respond to of 1571966

I see, you subscribe to the "the deficit doesn't matter" rhetoric. If that is what you see you might need glasses. The deficit does matter, so does other obligations for future spending. The deficit doesn't matter more than other obligations for future spending. If interest rates respond the way they should under the burden of this massive debt Interest rates respond negatively to debt mostly for two reasons. 1 - Concern about the ability of government to pay back the debt or the inflation that the government might allow to pay it back in inflated dollars. 2 - "Crowding out", if the government borrows money, less money is available for the private sector to borrow. In the case of social security #1 applies with or without the private accounts. 2 - Does apply to the private accounts because the extra money borrowed is the same as the extra money put in to private investments. And there is a huge difference between borrowing money today based on a mythical payback in 50 years... it's called interest expense. The payouts to social security grow in a way that has a similar net effect to having interest costs on the money owed. If the future payouts where static then you would have a point but they are not static even when measured in inflation adjusted dollars. Tim