'niceguy'-
I think this is where we differ.
Yes, it's called economic ignorance.
I and thankfully many others believe that the amount of debt you owe IS important. So is the amount of time you owe it for.
'Many others' don't believe this. Economists don't rate absolute debt as important. They always refer to GDP/debt ratio. For good reason.
Your argument is like saying that it is better for someone on minimum wage to be £10,000 in debt than it is for a millionaire to be £20,000 in debt - simply because the absolute value of the debt is lower in the first case. It's absurd, and patently stupid.
What you are saying is that it doesn't matter what I actually owe anyone. Just as long as a proportion of my income it's fairly low. I do understand your argument. I just think you are wrong. I believe it does matter.
Look at it another way. Let's say I have £1000 on my overdraft. Each year I ask my bank to raise my overdraft because hey....i'm getting a payrise. As a proportion of my income, it's fine. What you are saying is that there's no problem because I don't actually owe loads. But wind the clock forwards thirty years. So you think my bank manager would be unreasonable to say "Erm....when will I get my money back? You've owed me this money now for thirty years"
Christ. If you had an account with a bank, and your income grew annually (say, you got a 3% pay rise every year), your bank would be more than happy to keep offering extending your overdraft, so long as your income exceeded your overdraft proportionately.
Why? Because a) The bank knows that with a greater income, it is easier for you to pay the money back, and b) Because it is earning interest on your overdraft.
Which brings us to the second point:
It is not debt which is important, though the GDP/debt ratio is more significant. What is most important is the deficit. I've explained this to you 1000x before. When the deficit reaches above around 7% or 8%, then lenders become nervous, because they worry about the long-term ability to pay back the debts. Stupidly, this also results in an increase in borrowing costs, which means that deficit can spiral out of control. That is the most important worry during the financial crisis. It is why Greece is having difficulties, and Spain is on the brink.
Also, you are applying old rules in a new world. You are arguing that historically we owed more and everything worked. Yes maybe so. But that was based upon a time where everyone, bankers included thought that sovereign western governments would not default on loans. Iceland and Greece put a stop to that stupid notion. Now everyone with a brain understands that not even a government can borrow money indefinitely so the risks are higher.
This is just goobledy gook. What does 'not even a government can borrow money indefinitely' mean? Governments pay interest on loans. Western governments defaulted on loans because the deficit rose too high, and they couldn't afford to pay back on interest payments. The deficit skyrocketed because the financial crisis was transformed in to a sovereign debt crisis, but governments bailing out Capitalism in order so that the whole system didn't come crashing down. Didn't you notice that various Western governments started having problems reducing their deficits right after the financial crisis of 2008?
Lastly I do find it amusing how you are arguing that there is no debt/deficit problem. That we can and should continue borrowing because hey...there's no problem. Yet blame the very people we are borrowing money from (ie. the banks) for creating the recession in the first place. Maybe...just maybe if we hadn't have borrowed so much money in the first place, banks would not be in such a financially precarious position and we wouldn't also have to dance to their tune.
You're insane and unwilling to actually listen to any reasoning or arguments and you completely ignore any facts presented to you. You confuse debt with deficit and debt with GDP/debt ratio. Your grasp of fundamental economics is lacking.
Furthermore, your attitude is nasty and pernicious. People struggle with stagnating or declining wages over three decades, while the cost of living rises and house prices skyrocket - all due to neo-liberal policies. Naturally, this cut off demand. Without hocus pocus, this would have caused a decades long recession.
In order to keep the Capitalist machinery going, the banks pushed cheap credit on to people and sold the debts, after whitewashing the risks using credit-rating agencies. So the Capitalist machinery kept going, with no one having any money, and living in a huge bubble. Meanwhile, Capitalist profits soared, while everyone else had no money except in the form of debt, which they relied upon to live.
Finally, it all comes crashing down, and instead of blaming neo-liberal policies for attacking wages, workers rights, and pushing privatization, reduction in public services, etc. you blame ordinary citizens for daring to demand to want to maintain their living standards, and feed and cloth their kids, and live in a house, while a tiny minority of millionaires and billionaires soak up the wealth of nation for themselves.
Your attitude is ignorant, pernicious, and disgraceful.