Mike Shedlock (Mish) gives Us a fairly comprehensive Post on the problems with incurring Debt. The Scott Reamer link should be considered a Must-Read. There is little to say beyond what they highlight, except to propound the real basic nature of Money. This element relies totally upon peoples’ trust in its worth. Money is simply Paper, or electronic notations in some Computer, without Peoples’ reliance on its Value. The base advocacy of Debt fundamentally devolves into an expected and desired diminishment of the worth of Money, in order to pay off the incurred Debt with the least amount of economic pain. All current Political leadership never expect to pay off the borrowed Value of the incurred Debt, but a vastly reduced Value of commonly lowered Nominal value. The Business sector equally expects a like course for the value of Stocks and Bonds.
Here lies the real Problem of Debt! I could cause massive Heart failure in Political leadership, by a Demand that Treasuries in the Social Security Fund be Inflation-adjusted to Year of Purchase, so that resident Value is maintained. Suddenly, the great Social Security Crisis drifts away in the Wind. Politicians–do not worry; I have called the Paramedics. We will never see the foregoing occur, but there should be an inherent Demand by all Who paid into the Social Security program, that the Social Security system live up to its provisions.
The financial markets likewise engage in the same incited misbehavior, knowing that any Inflation in Stocks will eventually transfer over to the Consumption markets. People are losing the Value of their Earnings, Savings, and Investments through the deliberate and excited Inflation rate, which has been carefully hidden in Stock Prices. Articles like the Fisher piece is more fraudulent than it is informative, and while not illegal, remains deliberate attempt to steal–this time the Value of Peoples’ Earnings. lgl