Go ask Greece if government debt matters

It depends on the level of debt and the interest rates.

>It literally seems like they laugh at the idea that government debt could matter

You should ignore someone that does this.

The only time you should be worrying about paying debt is when the economy is booming, and that will happen naturally since more people working = more people paying more taxes etc

>>1010057
This is the perfect answer.
Thread closed.

>>1010057
>>1010088

I (OP) agree and this is exactly what I intuitively think. Now watch the below video.

https://youtu.be/YZNwdcESn90

The audience member is talking about government debt and then Varoufakis starts talking about the economy as a whole (I.e. bringing up a non sequitur, in my opinion) as if the audience member is talking shit.

>>1009980
Assuming this is an American politics question. Left wing people scoff because either:

1) they don't know anything about public debt
or
2) they know that America's public debt isn't as bad as some right-wingers make it sound.

The USA does have the biggest debt in the world, but it's also about median when you look at it as percentage of GDP. Providing that the government doesn't default on a significant percentage of its debt, and it doesn't pay its debt by printing more currency than is to account for inflation, the USA will maintain its market credit rate and the USD will remain stable and the world won't end.

>>1010134
>than is necessary to account for inflation *********************************
sry

Imagine you're an investor, who would you rather lend money, to a private company that might go bankrupt and disappear tomorrow, or to a government that might go bankrupt but won't disappear and sooner or later will pay?

Since you give the investor more security you can ask for lower interest rates. Also if you do things right and your economy is booming you will have more and more investors interested in lending you money you will get even lower interest rates so you can borrow this money and use it to pay the previous debts that had higher interest rates.

Yo have nothing to fear about public debt if you do things right.

>>1010113
>varoufakis
Why do people even listen to this guy? Seriously, a far-left former minister of finance who resigned because he didn't understand how the real world works and served only to deepen his country's financial crisis? He almost defaulted on Greece's debts, the madman.

>>1009980
The last time a world superpower was in as much debt as the USA they conquered Palestine from the Ottoman Empire and sold it to Walter Rothschild.

>>1009980
Adjust debt for inflation (1$ today may be worth less tomorrow), account for growth rate.

>>1009980
>Right wing person says that the government debt must be lowered by lowering taxes
>Left wing person scoffs.

ftfy

>So who is in the right? And this doesn't seem like an assertion from the left wing person that public services are valuable / we need investment now that will pay off later. It literally seems like they laugh at the idea that government debt could matter. Who is right?
There's a reason why some democrats are called "tax and spend" democrats.

However, there are politicians that only want to cut taxes, even if they can't get a proportional cut in spending (often claiming less taxes means more productivity, and more revenue, which usually isn't true going by real life examples) or raise benefits even though there's no means to raise taxes to pay for them.

it doesn't seem like you're representing the left's argument fairly, if you've even managed to grasp its primary tenets.

>>1009980
This is a fake position of the right wing. Only left wingers have ever cut into the deficit. The deficit increases drastically under Republican presidents and Congresses. They just pretend to care about debt and then declare war and throw billions into a toilet. Don't fall for the meme, memester.

>>1010270
The problem is there are politicians who are willing to increase debt to pursue an agenda of more benefits or lower taxes.

Because people want benefits or lower taxes more than they want a balanced budget, even though they're mad about the debt, they won't give up taxes or benefits to fix it. Each side blames the other for the deficit, and won't give in.

>>1010224
We owe 97.2% of our GDP as debt.
Britain owed ~300%.
Not nearly comparable.

>>1010270
>left
>having relevant arguments

I have never heard of a left wing person saying such things and if they do in america then i want nothing to do with american leftists.

>>1010337
>/pol/
>if it isnt a dubiously sourced ms paint image macro it isnt an argument

>>1010341
They do in my strawman arguments

>>1010359
I didnt want to say it since right wingers tend to react badly to such statements from my experience. But yes, obvious strawman.

>>1010343
Go ahead. What are the left-wing's arguements?

>>1010385
Tax the rich and make them pay.

>>1010385
Why do you want to get a specific set of arguments from a vague, arbitrary group of loosely aligned people?

OP I hope you're not pretending that Keynesians are leftists.

>>1010406
Because I had my wisdom teeth extracted and have nothing better to do than discuss government debt.
Also, I would like to see what the real intelligent left argues.

>>1010401
I hope this is not a serious answer.

>>1010425
Youre missing my point. Youre being retarded by pretending theres one vague, ill-defined political faction with a somehow unified stance on a particular issue which most people dont know shit about.

>>1010385

http://cepr.net/

>>1010437
But you do agree that those people are united by some core beliefs, right? In this case, increased government spending combined with higher taxes. If you go to the far-left, it'll be just spending and refusing to pay back the debt.

>>1010465

What do you classify as far left, firstly?

>>1010465
> increased government spending combined with higher taxes
That doesn't lead to high debt any more than lower spending with lower taxes.

> it'll be just spending and refusing to pay back the debt.
Now that's a strawman.

>>1010465
If you go to the far left, youve exited the realm of economic budgetary policy. The left can mean anything from Obama to anarchists and communists. Youre lumping all these people together on a left-right scale that is in and of itself hugely ambiguous. Are you talking about economics? Conservatives vs progressives? "Left and right" is a shit scale, because it offers no clarity.

Now tell me: who EXACTLY are you talking about? Keynesians? Social democrats? Progressives? I have no fucking clue, because youre trying to make politics into black and white, a dichotomy that holds no value once you get to specific issues.

>>1010442
>http://cepr.net/publications/op-eds-columns/patently-absurd-logic-on-budget-deficits-and-debt
>Just to go through the basic story yet again, the government is not like a family that has to pay off its debt.
Oh, that's great. Keep rolling the debt like a snowball, emitting bonds and more bonds and praying that you don't have to raise interest rates. This is the kind of mentality that led to so many debt crises worldwide. Also, keep in mind that each time you increase the debt, the budget suffers.

>>1010465
>If you go to the far-left, it'll be just spending and refusing to pay back the debt.
But that's false, it's the most extreme wings in both parties that want a balanced budget. The extreme left wants the top 0.1% rich capitalists to pay. The extreme right wants everything to be privatized, with a government so small, it can easily be paid for with negligible taxes. It's the centrists that don't want to pay, because normal people are often times single issue voters, who will vote on taxes or benefits, based on which they think will help them more.

>>1010498
The far-left as in Syriza, Podemos, communist parties...
I understand that there is no absolute definition for what far-left means, but there are some common aspects that, again, bring these parties together.

>>1010519
I keep forgetting how different Yurop and burgerland wings are.

>>1010504

What does it mean to say the budget suffers as a function of debt? Also, are you saying the global financial crisis was caused by the budget crisis?

>>1010519
My problem is that regarding budgetary balance there are only two extremes: people who oppose balance, and those who advocate for it (and then theres everyone in between). Thats literally all we can say about these groups. Sure one group might contaim more leftists than the other, but thats largely irrelevant. The only thing that matters is their stance on the issue youre discussing, and assuming other political stances using labels such as "left-wing" is naive, annoying, counter-productive, childish and ultimately useless.

>>1010548
I meant in the long run. Surely, the budget is going to be just fine after a loan, but when it is time to pay interest, you'll end up paying more on the long run.

>>1010548
And no, I was talking about cases such as Argentina's in 2001.

>>1010555
Unless that loan means growth more than the interest. You know, like exactly the same as a business loan.

>>1010555

So you're referring to risk - as in defaulting on loans? Or is it something else? What's going to happen to the budget if people have to pay more?

>>1010580
You will pay more than you borrowed in the long run, which takes its toll on the budget. You have the risk of ending up worse, unless you get a sufficient increase in tax-revenue.

>>1010057
As well as debt composition, future economic prospects, GDP growth etc.

>>1010608
Bill, I really can't recommend we aim for a bank loan. I know you have huge expertise in the personal computer field, but I find it hard to believe you'd be able to successfully market our products to millions of American families. This is clearly a niche product, Bill. If we take a bank loan, we will pay more than we borrowed in the long run, which takes its toll on the company budget. We have the risk of ending up worse, unless we get a sufficient increase in sales revenues.

>Things Steve Ballmer never said about Microsoft, circa 1976

>>1010608

what do you mean by takes a toll on the budget? how? and what do you mean the risk of ending up worse?

>>1010624

what's going to happen to gdp growth? future economic prospects, debt composition? will gdp stop growing - economic prospects disappear? and debt...composition what?

>>1010055
Greece can't literally print its own currency. Greece also can't tank the global economy by defaulting.

>>1010174
YOU DON'T UNDERSTAND, REDUCING GOVERNMENT DEBT IS A BOURGEOISIE IDEOLOGY DESIGNED TO SATIATE THEIR HATRED OF THE POOR!

If the United States ever defaulted on its debt, that would be it. Say goodbye to civilization and hello to WW3

>>1010739
T. Reagan

>>1010739
This is exactly why the U.S. can spend in a completely profligate manner for the foreseeable future, because if the owners of the debt were to ever call it in, they'd be destroying their own economies by asking the U.S. to come out and say "we're not paying you back. All that loan money? Gone. That's life, suckers!"

>>1009980
Defend the public debt requires either imbecility or bad faith.

It is basically a hole that the productive class must cover.

>And treating America as a separate case due to its magical dollar.

It's like a curse. For the rest of the world, of course.

The American debt hole is continuously covered by the productive class - from all other countries.

>>1010772
You can't call in treasury bonds. They have dates, you know.

>>1010680
Think about how many companies also didn't say that and ended bankrupt drowning on their own depts.

>>1010435
>Who was FDR
>What was New Deal
It's almost like it works ;^)

Yes, government debt must be lowered.

If you don't understand basic economics, go take an economics class or ten so you learn something.

>>1010776
Except there's the issue of transfer of capital which is real

>>1010811
>>What was New Deal
Illegal and unconstitutional.

MURRICA

>>1010806
History is covered in companies that fail and couldn't pay their debts. Far more failed than succeeded, that's for sure. But the ones that succeed so far have picked up the slack for those that failed, and that's why banks will keep loaning money to companies.

>>1011790
And that's why many economies on average grow, and why if you diversify, on average investing yields returns.