Peak Oil News and Message Boards

Well, at this point you are seeing debt saturation in entities big and small and little sign of capacity to make payments much less pay back entire loans. So, I think the debt to GDP ratio is a factor. Even more of a factor is the overall health of the Economy in regards to purchasing power.

.
Good debt is used to spend on appreciating purchase
it create a new flow of value , eventually being greater than the repayment
I.E. getting a mortgage eventually make you save on rent + create a pile of value in the property

Bad debt is used to spend on depreciating purchase
it create a sink of value ,eventually the repayment is greater than the income
I.E. buying "bling" when the monthly credit card is in the red

Same for government , building a new freeway can be a good thing , if it is useful
there has been plenty of bridge to nowhere just to please the voters
social programs can be a good investment , if only to keep the poor from revolting
it save on police and bullets ,
throwing money at every bleeding hearts is stupid ,
the bleeding hearts who get the most are not the most deserving , they are just the loudest

BahamasEd wrote:On a personal base, you should not have any debt.

And if you have assets, a good part of them should be in things that are not the debt of other people.

Well, NO debt is a nice goal, and one which my father and I were fortunate enough to practice 90+% of the time via self discipline, planning, and frugal living.

However, for the vast majority of people before, say, age 40 or 50 -- buying a house with no mortgage isn't feasible, or even if feasible, may not be practical.

Now, this doesn't mean one should buy 3 times the house one needs and go crazy with debt, of course. And people who lease instead of buying a car and end up ALWAYS having a big car payment -- to me that's like smacking yourself in the head all the time.

One strategy I advised friends/family on to save money and apply some discipline to their financial lives, was to use a 15 year mortgage vs. a 30. This ensured their house would be paid off well before they retired, that they'd build up equity at a reasonable speed, etc.

I got some nice meals, cases of beer or wine, etc. as thank you gifts when some of those friends were thrilled to have their house completely paid off in their 40's, with a huge cash flow for other things like retirement investments.

.
debt is a struggle , if one can handle it it's a good outcome
if one treat it as morphine , guess what happen ?

repayment on debt for fiscal year 2017
https://www.treasurydirect.gov/govt/rep ... xpense.htm

$139,126,156,864.33 $ that's 139 billions .......and rising !
the debt REPAYMENT is rising faster that the economy