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Originally Posted by SimNut
What really bugs me is they're adding two digits.
Many Americans think of credit as cash. If they have $5,000 in credit limit available on a card, they think of it like having $5k in the bank.
I just hope the members of congress don't look at the extra digits as money in the bank available to spend.
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Well, all thats needed for debt to have real value is for everyone to think it does.
If the bank thinks it will get payments on the debt and the party that received the
loan thinks the money it has received has some real value, then everyone is happy.
The bank can count the debt promise as an asset and the party that received the
loan has cash in hand. Value has been created from nothing.
So long as all the banks believe the debt promise has value and all the parties
that received the loans believe the money they have is worth something, debt
is a good thing.
Essential for the economy as it is.
Weather this is a good state of affairs or not is another matter.