Article

2010-06-19 Economy

Greenspan Says U.S. May Soon Reach Borrowing Limit

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Posted by g(r)omgoru 2010-06-19 00:00|| || Front Page|| [2 views ] Top

#1 It's not so much borrowing limit as it is borrowing rate.

And come the midterm elections I think you'll find you reached it long ago.

Posted by gorb 2010-06-19 00:57|| 2010-06-19 00:57|| Front Page Top

#2 Once you can't pay the interest on the debt, the interest rate goes up.

It starts a parabolic curve leading to bankruptcy.

Governments should not be in debt.

Posted by Bright Pebbles 2010-06-19 09:14|| 2010-06-19 09:14|| Front Page Top

#3 Governments can always borrow domestically by printing money, which is what the USA and other governments are doing at the moment.

That road leads to hyper-inflation and they are taking a massive bet that structural deflation will last enough to stop inflation taking off big time.

IMO, the fiscal equivalent of going to Vegas and putting a few trillion $ on black to win at the roulette table.

Posted by phil_b 2010-06-19 20:54|| 2010-06-19 20:54|| Front Page Top

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