It’s been said before, but rarely this well. There’s more where this came from: In the End, There Is Only the Debt – Victor Davis Hanson – The Corner on National Review Online.
In short, the United States is floating far more loans than ever before in peacetime, and for longer scheduled durations, because interest rates are only a quarter of what they have been in the past. But this theory that we can endlessly multiply the size of our debt because the service costs remain low and static is a prescription for disaster — like the credit-card introductory offer of 2 to 3 percent for 6 months that hooks the naive into charging thousands of dollars, only to end up without the means to service the debt when the rate climbs over 20 percent. For a technocracy that is Ivy League certified and brags about its competency, we have fallen into the age-old trap that snares the naive ARM house buyer, the teenaged MasterCard mega-borrower, and the “free” coupon holder who heads headlong to Vegas.
That we are borrowing now at cheap interest hundreds of billions for things that are unnecessary or counterproductive will only make it worse, psychologically, when we have to pay it all back with high interest. It reminds me of the boom-to-bust neighbor who bought his superfluous super-duper, hydra-headed, metallic red-painted hydraulic vine-cutter with easy farm loans in the late 1970s and, when headed for bankruptcy in the 1980s, looked at the now rusted, useless contraption in his barnyard and sighed to me, “And I’m still paying 17 percent on that sucker!”