Think about this. Does borrowing money make you stronger? Or weaker and more vulnerable? Why should a supposed superpower, especially one which happens to control the world's reserve currency and fiat to boot, EVER be borrowing money?
Borrowing money is generally for LOSERS ... beggars .... Wealthy, financially savvy people ONLY borrow when they perceive themselves to so many great investment opportunities that even they are tapped out of internal funding ... even they feel compelled to beg from some more wealthy entity. And, note, I said INVESTMENT opportunities: things which promise to throw off on-going cash flow far in excess of the interest and opportunity cost.
Wealthy people do NOT, for example, borrow money to buy a personal residence or a car. ONLY ERSATZ WANNA-BES borrow for a personal consumption item. If you see a "rich" person who has a mortgage, dollars to donuts that person's real financial picture is considerably weaker than the show they are putting on would indicate.
Simply put: The FIRST law of investing is you should only borrow when there is a high probability cash flow opportunity and you are tapped out. Wealthy, intelligent people and fictitious entities do not ever borrow for consumption. Not ever. Borrowing is not indicative of a position of strength but of weakness. Borrowing for consumption or to pay interest is an indication of gross incompetence ... stupidity really. Too dumb to live.
There is a financial concept known as "Internal Rate of Return" which allows a savvy, wealthy person to quantitatively decide if they should borrow versus using their own savings. I am not going to go into explaining that here, but you can look it up easily enough. And you should. What you will realize, if you think about it for even a little bit, is that NOTHING the US borrows money for meets the IRR test. NONE of the US borrowing can be judged intelligent or financially savvy. Therefore, it is a true statement that EVERYTHING THE US BORROWS MONEY FOR IS A MISTAKE....
FURTHER, THE US HAS ALREADY DEMONSTRATED THAT IT IS UTTERLY INCOMPETENT TO EXERCISE LONG TERM MONEY MANAGEMENT OF A GOVERNMENT LEVEL. HOW MUCH MORE EVIDENCE DO YOU NEED THAN THE LAST 100 YEARS?
What has our AAA credit rating gotten us? Addiction and organ failure; it has taken us to the edge of death as a nation. The current low interest rates, supposedly a temporary matter, have had a pernicious effect on governance and on the citizenry. Emergency and bubble has led to another emergency and another bubble ... and then another.
Wake up. Smell the roses. Borrowing money is like using just a "little" heroin ... and the US has become a junkie.
Do you think it is a good idea to feed a junkies habit with "loans" and another fix? Or is it a case that the sooner the junkie goes cold turkey the better?
On a more common nonsensical level, a personal level, does anyone think it is good for YOU that the government is holding interest rates at near zero and WAY BELOW THE RATE OF INFLATION? Do you LIKE the fact that money in the bank is worth less and less and less .... that your interest is pitiful, inadequate to come remotely close to covering your loss from devaluation.
Do you think that is GOOD? You think it is GOOD for the US -- the world's most incorrigible "heroin" addict -- to be getting more heroin on credit? Are you nuts?? Are WE nuts????
I personally think it would be a HUGE benefit to the country if our credit rating was knocked down so low that the Federal government couldn't borrow anything for less than 5%. 10% might be even better but it would probably be too much to jump us there right away.
The sooner our Junkie Nation gets *completely* out of debt the better. Interest is ONLY something you should use when you KNOW you have a good investment -- and investment so low risk vs. opportunity -- that basic math says you should borrow. Those sorts of situations don't come up that often for people and they come almost never for countries -- I can't think of a single example in the modern era and I am not even sure before that (if we borrowed to buy Alaska or the Louisiana Purchase that would be a counterexample ... but I can't think of anything since then).
Just use common sense. It is GOOD for the country if the Federal Government is massively discouraged from ANY more borrowing and massively encouraged to scrimp and save and live on bread and water until it gets its debts (addiction) worked off. Interest -- like laws -- make the economy INEFFICIENT. Only a financial moron would make an argument for financial inefficiency. We have had a succession of financial morons in the Presidency. Even Clinton screwed up pretty massively in this department, but I give him some credit for at least a good try. Before that I'd argue you have to go back ... well ... decades and decades ... to find any President who evidenced even a basic level of competence in financial management.
PRAY for our credit rating to be lowered and interest rates to go up considerably. It may be painful, but so is getting any major but life saving surgery. Putting off the surgery only allows the disease to grow worse.
Those who are wringing their hands about our national credit rating getting a downgrade are demonstrating sheeple behavior ... really low intelligence, imo. But do your own thinking.
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I know this isn't the most smoothly written piece, but the idea just popped into my head and I wanted to get it out and get on with life.
I have come to realize that men are not born to be free. Liberty is a need felt by a small class of people whom nature has endowed with nobler minds than the mass of men. -Napoleon
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