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


To: Elroy who wrote (316378)12/19/2006 4:46:44 AM
From: Alighieri  Read Replies (2) | Respond to of 1573924
 
I don't think there is an answer for this question because it is about two different issues - liquidity versus profitability. The debt is not threatening to the debtor as long as he can service it (liquidity). However, the debtor also wants to be able to keep as much income as possible (profitability). There is no magic number like "20% of operating income being used to service debt is ideal".

It's a silly irrelevant point. The US jas reached the point where it can't run a deficit anymore, period.

Al



To: Elroy who wrote (316378)12/19/2006 6:39:43 AM
From: Road Walker  Respond to of 1573924
 
re: The debt is not threatening to the debtor as long as he can service it (liquidity).

It becomes a big thing when the debtor can no longer afford to invest in change (for example alternative energy). The debtor gets passed by by the more fiscally responsible.



To: Elroy who wrote (316378)12/19/2006 8:40:49 AM
From: combjelly  Respond to of 1573924
 
"There is no magic number like "20% of operating income being used to service debt is ideal"."

Maybe not. But when debt service is the third largest item on the budget, you are probably way in over your head. Especially if the debt is the equivalent of credit card debt, which likely went for things that won't appreciate over time. The US isn't doing the equivalent of buying a house with the debt, we are doing the equivalent of having a blowout Super Bowl party.