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To: April Lexington
Massive defaults by mainstreet deadbeats have already occurred and are peaking at this instant. Private sector debt service to income has already fallen hard from its peaks and is back to mid 1980s levels - walking away from $3 trillion owed kinda does that, and the stiffed bankers not signing up for another round of punishment does the rest.

There is nothing remotely unsustainable about government debt service either. They all have sufficient income to pay their debts many times over, most of them at very low rates. But populists and socialists think giveaways to half the population are a birthright and measure what can be "sustained" after make believe promises to themselves. They can't and they won't. But none of those things is a prior charge to debt service, and nothing but populist idiocy sustains the illusion that they are.

When governments have the support to vote high taxes as well as high spending they don't have this issue. But as soon as they can only remain in office by promising redistribution on the one hand and not actually following through with it on the tax side, on the other hand, debt service will climb as a portion of their expenditure. And that is just fine with me. It is undoing some of the ongoing robbery they are constantly attempting.

Would I rather have a macro economy in which the government takes only 10% of income, than one in which is takes 20% of income and returns 10% of it to private savers as debt service? Sure. But I'd rather have the second, than a government that takes 20% of income and gives all of it to deadbeats for nothing.

104 posted on 04/14/2010 2:22:28 AM PDT by JasonC
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To: JasonC
As usual, Brilliant! But... maybe the government could cut taxes to zero and just borrow all of the money. Why penalize the serfs if the government has more than enough cash flow to cover the debt service? Cut taxes to balance the cash flow with the debt service...
108 posted on 04/14/2010 7:32:58 PM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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