Posted Jun 3, 2014 by Martin Armstrong
QUESTION: Why do governments borrow? Why do they never reduce the debt?
ANSWER: Because they can. They actually think they are the exception to normal economics. People ask all the time, can’t they see this debt crisis? No. When I raise the topic in different discussions with various governments the reply is always the same – “We are different. We are the government.”
To them, let us say you go to a store and you want to buy $50 worth of something. The cashier tells you that will be $100. You ask why? He says the customer before you couldn’t pay his bill so it is your obligation to pay for what he bought. This is the way they look at things. Why pay off past debts when you can create new ones? What’s the point in running if you can’t do anything you want to do? That’s not fun!