My head is spinning from all the articles, blog posts, talking heads, and water cooler gossip about the Stimulus Bill, and so far I can't figure out how the hell we're supposed to pay for it.
I understand that so far, as a nation, our credit is still pretty good. China and Japan own well over 40% of our foreign debt, and for some reason they keep loaning us money. A sizable percentage of our Gross Domestic Product goes toward servicing this debt, by paying interest. This is money that is being siphoned out of our economy simply to keep up with the loan payments; it's not doing anything useful here.
I guess I have TWO questions now:
1) How much are we paying in interest?
2) How will we eventually pay off this debt?
It seems to me that one of the reasons our nation got into this terrible economic situation is due to people taking out mortgages that they couldn't keep up. Isn't that what we're doing here?
This is an open forum to discuss the issue. If anyone can clarify how we're going to borrow enough money to jump start our economy without bankrupting us at the same time, I'd really like to know. I'm looking for concepts that you can back up with solid economic reasoning. Because looking at the present numbers, it seems that we're caught in a situation that will continue to spiral out of control until we default completely.
In other words, reassure me.