Comments on: Debt and Moral Hazard

By: Jack

Jack — Fri, 04 Dec 2009 02:45:51 +0000

I just cannot wait until I turn 50, which is roughly a bit over 20 years from now. The credit market and the federal reserve will be done for and social security will only be mentioned in the history books.

By: DebThompson

DebThompson — Wed, 18 Nov 2009 06:16:38 +0000

Debt is a national security threat, look at how tied we are to China. Very sad for our kids and grandkids.

By: Secure Saving

Secure Saving — Tue, 02 Jun 2009 04:13:20 +0000

I think the point about “short term myopia” is really the key point. People think their 15 years of experience is particularly meaningful. There’s no such thing as a “new economy.”

By: Brad

Brad — Sun, 31 May 2009 03:22:05 +0000

Well China is definitely making noise in that direction. At the end of the day however, the exporting countries like China basically HAVE to keep buying our debt, so that our dollar stays reasonable, so they can sell us stuff. At the same time they don’t want their hundreds of billions of dollars of treasuries to be worthless, so they may be winding things down. China has already signaled they’re going to move to shorter duration debt.

Sadly much like the consumer market, the country as a whole isn’t willing to rein in their debt until their credit limit forces them to.

By: BMB

BMB — Sat, 30 May 2009 13:07:36 +0000

Fabulous post Brad.

Debt is the huge monster threatening to squash us all, yet none of us want to live without it — because if we can’t find a way to spend more than we make, then we can’t have everything we want.

The time will come — whether it’s starting now can be debated — when we will simply not be allowed to live beyond our means. And that applies to both the consumer AND the gov’t. Today, our gov’t is really pushing the envelope of what the rest of the world will tolerate when it comes to funding our profligate ways. They’re trying to force even more debt down the throats of consumers that are already gagging, in the name of ’saving’ the economy. And on top of that, they’re setting a very poor example by continuing to spend money that they themselves do not have, all in hopes of kicking the can down the road a few more years.

If the rest of the world eventually says ‘no mas’ and decides to stop lending to us, we’re in big trouble. And you’re right — we may be already past that point.