[Tchocky]

Originally Posted by Skybird

Can you figure the yearly interests for 1.4 Trillion? It's the second highest item in your yearly budget. Germany pays more than 20% of the yearly GNP - for interests alone. Interests only! This reduces the existing debts in no way - it just maintains them on their current level.

By numbers for 2001, in order to bring federal debts to nill, the total federal tax incomes of four years would be needed to spend exlusively for discharge of federal debts - with not one Euro left for any other purpose.

I wasn't aware that debt was so high in Germany. I suppose with the relatively high tax rates didn't cope well with unification. The 90's weren't exactly a shining economic decade for Germany.
I still believe that with a rather uncertain economic future, infrastructural & capital borrowing should be encouraged for two reasons. In time, if properly used, it will pay for itself, and it can help the economy ride out hard times, enabling it to pay back when growth is higher. Capital borrowing is sustainable, current account borrowing is not.
Sadly, that's quite theoretical, and today we see many governments continuing to borrow when logic and a healthy economy dictate otherwise. The UK shouldn't be borrowing right now, it's debt is climbing faster than ever.
Your caution on borrowing is well-placed, uncertain borrowing can create a self-sustaining debt cycle, continuation of borrowing to pay the interest.

With a debt level of over 9 trillion, the US currently is spending over 250 billion per year for interests alone.

The US, I believe, is currently suffering from a mismanaged debt circle that has its roots in profligate defence spending. Whether it was worth it isn't a question i'm going near.
I don't know if/how it will break.

The ICF also uses this dependency. Under the alibi of wanting to activate the economy wehre it wishes to bring it under foreign control, new credits are given only when being designed for serving the interests of foreign "investors". By that, the debts of that country get increased constantly, which means a vicious circle of growing debts and higher interests and more credits and deeper dependency and a take over of national economy.

Oh, very true. (do you mean the IMF?)
In the late 1980's the IMF were about six weeks away from taking over Ireland's economy, so badly was it managed. Thankfully cooler heads prevailed in Dublin.

It does not hurt too much to borrow...?

No, it does not. Unfortunately governments are not very good at it, and the terrible beauty of representative democracy means that it is political suicide to be good at it.

However, as several commentators already have figured pout over here, the budget balance is a singular event only, because it is not really the result of planned action, but a chain of (sometimes random) lucky developements that went better than projected. when hearing on TV that citigroupo today has admitted to have another 10 billion, with a need to write off another 20 billion, I was convinced (again) that the stockmarket troubles are far from being over, and this as well as certaion national trends, energy prices, and the ill dollar will bring the budget into red numbers again this year.

On the face of it, a budget deficit may look troublesome. It well may be, and this depends on the composition and management of such a deficit.
In a shaky economic climate, if a government can run a deficit, it should. To be returning more money to the economy than you are taking out of it encourages investment and general economic activity, creating capital that can boost the economy into a situation where repayment is possible without being punitive.
Paradoxically, borrowing for capital now could create a situation where realistic debt management is possible.
however, you're more au fait with the German economy than I (think I've got a couple of German Euro coins here though, love those eagles ), so after the picture you've just painted I ain't so hopeful.

Signed,
A. Theoretician. :p