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Old 2012-05-19, 08:52   Link #11
Aria Company
Join Date: Nov 2003
Originally Posted by mangamuscle View Post
^ I hope you don't consider China an ally and remember the federal goverment is eating money at an acelerated rate, you can mark my words, that debt ceiling will continue to be increased, the sky is the limit!
There's a secret about the US debt people don't want you to know. It's a complete non-issue. How can that be you ask? It's over 100% of GDP! Surely this is a cause for concern, right? Well, it isn't. Look up the interest rates on treasury bonds then look up inflation. You'll notice something interesting. The rate of return on those bonds is less than inflation. What this little bit of trivia means is, people are paying the US government to borrow money. The amount the US pays back once adjusted for inflation is less than the amount borrowed. This is why the credit rating dropping was such a big deal last year, if the interest rate went up, new debt would be a problem. As of right now, the US government is literally turning a profit on borrowed money. Yes, this is broken. Yes, investors realize it. However, the stability of US treasury bonds is considered worth the loss they take as they will not risk taking a bigger loss with a less stable bond.

Edit: Regardless, this is all completely off topic. I'll now return you to your regularly scheduled fear mongering.

Last edited by Kamui4356; 2012-05-19 at 09:03.
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