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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (129638)	1/13/2013 7:55:59 PM
From: RetiredNow	1 Recommendation Read Replies (1) \| Respond to of 149317

Why? Isn't it obvious? It's nothing more than mathematics at work. It has to do with compounding interest and the ever rising circle of more debt. All Finance 101 students learn this: that there is an optimal level of debt in any economic enterprise and that once that optimum has been exceeded, weighted average cost of capital goes up. Of course, our government can print money to buy Treasuries, which acts as a suppressor of the market rate of interest, also known as Financial Repression. So what they have in effect done is transferred the increases in the weighted average cost of Treasury debt into a loss in purchasing power through the printing of money. The incremental cost is still a reality and has not disappeared, but rather it has been hidden. All of this new debt inevitably has the impact of crowding out private capital formation and investment as the finance industry and government expenditures take up more and more of the private economy. This slows down economic growth rates. So what do all these methods of stealing from the future to make today better do? It steals growth from the future. Well, the future is today and growth is abysmal, which means jobless rates remain stubbornly high. Welcome to the consequences of these policies.