I misunderstood your post and changed my response when I realised it. I thought we were talking about economies rather than individuals and was trying to understand it that way.
Here's a bit of a hodge-podge reply to your latest post.
A bit of government debt is usually a useful and efficient thing even in normal circumstances. So I don't rule its use out just because bad things happened to Greece.
What happened to Greece noticeably didn't happen to the US. Why? One reason. The US has its own currency and manouevring a currency to conform with your own needs is, in my view, important. Whereas the Greeks were stuck with the Euro which is managed to suit the German economy.
So when you talk Greece, I think currency-related debt peoblems. In contrast, Japan has had a huge debt-GDP ratio for ages as well as the yen and seems stable enough.
When interest rates are low and you can borrow to build valuable infrastructure, why not do so? Sometimes, the answer is you don't want governments to crowd out private industry. Sometimes the environment is such that private industry isn't investing even in low interest rate environments and a government ought to take advantage.
A government can afford to take a long view - far longer than a budget period. The Hoover Dam was earning its keep long after it was built during the Depression. Doubtless folks scolded Roosevelt for spending more than the US was making in the 1930s.
We recently saw the US government increase its debt to extend support for the jobless. That helped stabilise consumption for businesses as well as keeping folks from starving.
If governments all scrimp and tighten their belts at the same time during a recession, everyone loses because trade and demand disappear from the economy.
The countries that tried to live within their means during the recent debacle contracted faster than those which adopted government growth programs - so the countries that followed the balanced budget philosophy actually saw their debt increase faster than many of those that spent more than they received in taxation. This is called the fiscal multiplier: "New evidence came from the American Recovery and Reinvestment Act of 2009, whose benefits were projected based on fiscal multipliers and which was in fact followed - from 2010 to 2012 - by a slowing of job loss and private sector job growth." https://en.wikipedia.org/wiki/Fiscal_multiplier
And actually, in a growing economy, you maintain the ratio of debt to GDP by slightly outspending what you take in.
So yes, there are circumstances in which it is a good thing when the government borrows more than it makes. This may not be common sense but if memory serves it is the sort of thing taught by many economists.
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