Peter Schiff on our debt issues

"The argument that America needs to pay its bills is just hollow rhetoric.

Paying off one's Visa bill with a new and bigger MasterCard bill can't be considered a legitimate payment of debt. At best it is a transfer. But in the government's case, it doesn't even qualify as that.

...the purchasing power of the food stamps had to come from somewhere.

The government can't create something from nothing. Taxation transfers purchasing power from people living in the present to other people living in the present. In contrast, borrowing transfers purchasing power from people living in the future to people living in the present. The good news for politicians is that future people don't vote in current elections (and current voters don't seem to appreciate the cost to their future selves of current policy).

...in the less than five years, the federal government has added, on average, about $1.3 trillion per year in new debt, a pace that is four times higher than the growth. If the deficit were subtracted from GDP, America would be shown to be stuck in a severe recession that Washington can't acknowledge. But such a reality is more consistent with the dismal job prospects and stagnant incomes experienced by most Americans.

The belief that deficits add to the economy, and that debt can be dealt with in an imaginary future (that never seems to arrive) is the foundation upon which the [government] can argue that borrowing is the equivalent of paying.

...What is alarming is that the media and the public have swallowed it so willingly. As they call for limitless increases in borrowing, [many elected officials] have offered no plan to reduce the current debt...

...We are in such a deep debt hole that there is no solution that does not involve serious economic pain.

...If they cut the deficit, this phony economy may likely implode and cause widespread distress.

...The more we borrow and spend today, the more we will suffer tomorrow when the bills come due.

...cutting government spending now helps the economy by allowing the economic adjustment to happen sooner rather than later.

...Unfortunately our debts don't leave us much in the way of choices.

We can choose to pay now or try to pay later.

But the longer we wait the steeper the bill."

Peter Schiff