tag:blogger.com,1999:blog-7112945660401255413.post5582726470975526067..comments2023-05-24T04:12:10.274-04:00Comments on House out of Focus: When you owe the bank a trillion dollarsUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7112945660401255413.post-60494962638399833282011-08-07T21:47:18.893-04:002011-08-07T21:47:18.893-04:00Living on what you earn seems prudent, but it'...Living on what you earn seems prudent, but it's only possible with your current standard of living because in some years you borrow much more than you earn. And that's perfectly normal, but somehow invisible in the current societal conversation. When you buy a house, or go to college, or send a kid to college, or deal with a serious illness, or lose a job, or in a million other common circumstances, you don't live on what you earn. You live on what you earn plus what people will lend you.<br /><br />There are valid conversations to have in those years about whether you should borrow the money, and how you will pay it back at some point, and what other income you might pick up or what other expenses you might drop. But it would be insane to tattoo "bad credit risk" on your forehead before going to the bank and asking for a loan. And that's where the government could take a cue from how prudent households should act. Not because households don't borrow money, and not because the government is like a household, but because acting batshit crazy is a poor approach for both a household and a government.<br /><br />And I'm disappointed that you're not personally coining money. Because that would be cool.Michaelhttps://www.blogger.com/profile/16985892327107710890noreply@blogger.comtag:blogger.com,1999:blog-7112945660401255413.post-10507748656287777952011-08-07T20:32:17.458-04:002011-08-07T20:32:17.458-04:00Two points: 1) you are of course correct that borr...Two points: 1) you are of course correct that borrowing for capital improvements (such as buying a house or building a highway) is not only common for households and businesses but actually a good idea in many circumstances. For instance, if you had people lining up to offer you long-term loans at 2.5%, like the federal government does.<br /><br />Second, and this is the most important, the federal government is not a household and should not be run as a household. This should be really obvious: households don't coin money, they don't have to defend against other households, and they neither retire nor die--a government should never reach its peak earning years.<br /><br />Finally, while conservative commentators like to make this analogy to a household, they wouldn't make the obvious corollary: in a household, the welfare of the people is dependent on a certain basic level of revenue. In our household, we live on what we earn. The nation, though, does not live on what the federal government takes in. Because the government is <b>not like a household at all</b>. Obviously.<br /><br />Thanks,<br />-V.Vardibidianhttp://www.kith.org/journals/vardibidian/noreply@blogger.com