I think that I've written on this subject before, if I haven't then I really should have.
First, you need to realize that there are two types of debt...good debt and bad debt. Good debt lets you buy today what need but could only afford if you saved for a number of years. Bad debt is debt accumulated because you can without any real intention of paying it down.
Good debt is getting a mortgage so that you can buy a home. It's also buying a new, reliable car rather than buying an unreliable cheap hunk of junk that you put $500 a month of repairs into. It's buying a new washer and dryer now instead of spending $1.50 a load at the laundrymat. In all these cases, you have something you need in order to live comfortably where you could save for a year (or forty) to pay for it without debt, but in order to do so, you would incur as much, if not more, expenses to survive before you are able to purchase your debt-free item.
Bad debt is used to buy a new couch because your old one doesn't match the living room paint. A new television because your old one isn't flat screen. A new car because your old one is a year old (and for no other reason).
[Notice, I'm not saying that buying dinner with your credit card is "bad debt"--actually, using a credit card for small purchases can be a good thing if you pay the card off in full every month, even if it has a high interest rate. It helps your credit score to do that sort of thing and you could earn some nice perks if the card offers them. Even having a card with some debt on it (with a low interest rate, of course) helps your credit score.]
Striving to be debt free is admirable, but not very practical. And bashing the national debt just because it's debt is superficial. Where would we have been in WWII (or the 1980s with Reagan vs. the USSR) if we hadn't borrowed money to build our military? If some Republicans had their way, we'd either have to delay war until our amount of collected taxes could pay for the supplies that we'd suddenly need (above and beyond the amount used in non-wartime) or worse, we'd be stockpiling money (or bombs and planes that may be obsolete when they're finally needed) to pay for unexpected situations.
And yes, I have a slight problem with "rainy day" funds. In theory they're wonderful and NECESSARY. But a couple years ago VA voted to increase our rainy day fund--that's right, in the middle of a recession. Obama was sending out money by the bushel for shovel ready projects in the states to keep workers working (if not hiring more people) and VA was putting that money to good use: right into the rainy day fund, which has only been raided to balance the budget a couple times. Yes, rainy day funds are essential to helping when tax revenues fall short for some reason, like the housing market goes bust, decreasing the amount of property taxes collected, but the fund shouldn't be a huge portion of the taxes collected--government should really be striving to not have a situation where unexpected budget shortfalls happen: they should be aware that prices won't always go up, though Americans have let this fallacy lead them head-first into just about every "panic", "recession", and "depression" we've had.
In short, governments shouldn't fill their rainy day fund when they need money to move to keep people employed--that'd be like voluntarily increasing your retirement savings while sleeping on the street because you've lost your house. And refusing the borrow money because it's borrowing money is stupid if it means going without something you desperately need.
Yes, the national debt is too high. Yes, it needs to be paid down. But striving to get rid of all debt is futile unless we want our government to sit on piles of money doing nothing. Money that wouldn't be paying teachers, fighting terrorism, saving the Chesapeake Bay, etc. The national debt exists to let us invest today, without hurting our ability to pay for other necessities, and pay for it over time. The problem is that Congress saw it as being a blank check...much like many Americans see a credit card as a blank check to max out and pay the bare minimum on every month.
First, you need to realize that there are two types of debt...good debt and bad debt. Good debt lets you buy today what need but could only afford if you saved for a number of years. Bad debt is debt accumulated because you can without any real intention of paying it down.
Good debt is getting a mortgage so that you can buy a home. It's also buying a new, reliable car rather than buying an unreliable cheap hunk of junk that you put $500 a month of repairs into. It's buying a new washer and dryer now instead of spending $1.50 a load at the laundrymat. In all these cases, you have something you need in order to live comfortably where you could save for a year (or forty) to pay for it without debt, but in order to do so, you would incur as much, if not more, expenses to survive before you are able to purchase your debt-free item.
Bad debt is used to buy a new couch because your old one doesn't match the living room paint. A new television because your old one isn't flat screen. A new car because your old one is a year old (and for no other reason).
[Notice, I'm not saying that buying dinner with your credit card is "bad debt"--actually, using a credit card for small purchases can be a good thing if you pay the card off in full every month, even if it has a high interest rate. It helps your credit score to do that sort of thing and you could earn some nice perks if the card offers them. Even having a card with some debt on it (with a low interest rate, of course) helps your credit score.]
Striving to be debt free is admirable, but not very practical. And bashing the national debt just because it's debt is superficial. Where would we have been in WWII (or the 1980s with Reagan vs. the USSR) if we hadn't borrowed money to build our military? If some Republicans had their way, we'd either have to delay war until our amount of collected taxes could pay for the supplies that we'd suddenly need (above and beyond the amount used in non-wartime) or worse, we'd be stockpiling money (or bombs and planes that may be obsolete when they're finally needed) to pay for unexpected situations.
And yes, I have a slight problem with "rainy day" funds. In theory they're wonderful and NECESSARY. But a couple years ago VA voted to increase our rainy day fund--that's right, in the middle of a recession. Obama was sending out money by the bushel for shovel ready projects in the states to keep workers working (if not hiring more people) and VA was putting that money to good use: right into the rainy day fund, which has only been raided to balance the budget a couple times. Yes, rainy day funds are essential to helping when tax revenues fall short for some reason, like the housing market goes bust, decreasing the amount of property taxes collected, but the fund shouldn't be a huge portion of the taxes collected--government should really be striving to not have a situation where unexpected budget shortfalls happen: they should be aware that prices won't always go up, though Americans have let this fallacy lead them head-first into just about every "panic", "recession", and "depression" we've had.
In short, governments shouldn't fill their rainy day fund when they need money to move to keep people employed--that'd be like voluntarily increasing your retirement savings while sleeping on the street because you've lost your house. And refusing the borrow money because it's borrowing money is stupid if it means going without something you desperately need.
Yes, the national debt is too high. Yes, it needs to be paid down. But striving to get rid of all debt is futile unless we want our government to sit on piles of money doing nothing. Money that wouldn't be paying teachers, fighting terrorism, saving the Chesapeake Bay, etc. The national debt exists to let us invest today, without hurting our ability to pay for other necessities, and pay for it over time. The problem is that Congress saw it as being a blank check...much like many Americans see a credit card as a blank check to max out and pay the bare minimum on every month.
