Tell me again why the feds should stop borrowing money, 'cause I don't get it

[LuckyTheDog]

At these rates, we should borrow as much as we can and put it to work in our economy to pay for things we need like roads, bridges, airports and new schools.

NEW YORK (Reuters) - U.S. Treasury prices soared on Thursday and benchmark 10-year note yields fell below 2 percent for the first time as global economic fears sent investors scrambling to safe haven government debt.

U.S. bond buying intensified after data showed that factory activity in the Mid-Atlantic region plummeted in August while sales of U.S. existing homes unexpectedly dropped in July.

The data added to concerns that the U.S. economy will head back into recession at the same time as the country's rising debt load and record deficit leaves the government and the Federal Reserve with fewer options to stimulate the economy.

More: http://finance.yahoo.com/news/US-bond-yields-plunge-as-rb-3652621245.html?x=0&sec=topStories&pos=main&asset&ccode

[OHdem10]

1. It is more a psychological hang-up than anything else for some

TeaPartiers.

This New Republican Party have globbed onto what they
call Free Market Capitalism. Being Absolutists in
their thinking--they cling to the notion that if
left to its own devices the Market can cure all ills
and right all wrongs. Since the New Rich are not
all economically patriotic, they want to pay as little
tax as possible. These Free Marketers have decided that
the deficit is the problem and the Deficit must be corrected
yesterday. They appear to be willing to ignore all the
signs of possible double dip recession. They seem to
believe the more they cut(and therefore lay more people
off or fire them) the faster the economy will adjust.
Follow the Milton Friedman economics.
The Republicans fight harder and are willing to push
the envelope to have things their way.

There is another school of thought which believes that
when an economy is in crisis and in danger of recession
the Government is the only entity large enough and with
resources behind it to intervend and the Government steps
in with measures that bridge the gap until Business gets
back on its. Deficit Spending is seen by this group as
a means of getting the economy moving, even if you must
borrow and temporarily add to the Deficit.
John Maynard Keynes--Economics Economy Theory might
be more helpful.

Of course, Liberals who prefer Keynes in times of crisis
understand that just as soon as we get the Economy really
moving--we must tackle the debt and deficit.

[alc]

2. Greece. Ireland. Spain

It's very rare that we spend more this year, then cut back next year. Even much of the "one-time" stimulus money went to increasing state programs that can't easily be cut by states (jobs & services) and adding federal oversight that won't be scaled back.

So it's VERY likely that any additional spending we do now (borrowed at no interest) will have to continue when rates go up. We need to be very careful about what we spend more on. Even without increasing spending, our 10-year projections are to double debt (CBO & Obama say that, not just the tea party). And we're already past the IMF safe limits in many measures.

Spending more needs to come from changes to the tax structure, not from an ability to borrow at low rates.

[LuckyTheDog]

3. So, do both

let's borrow now AND raise taxes over time. We could GROW out of this "debt problem" pretty quick if we did.

[Javaman]

4. we are at a rare point in history

where we could barrow and make gobs of money on invested returns to the nation.

but alas, we are being lead around by the nose by half wit tea baggers, extreme right wing fundies, do nothing institutionalized repukes and a complacent media out for ratings based on hysteria.