No, it means that you're being robbed and five, ten years into your mortgage, you can't afford the non-mortgage purchases you could when you started the mortgage.

"So what do you do if your only source of income is wage or salary that doesn't keep up with inflation."
In this case people selling utilities, food, gas,cars, and everything but whatever you happen to produce can raise prices. This is another way of saying the real price of what you're selling is decreasing.

So what do you do if your only source of income is wage or salary that doesn't keep up with inflation. The % and total going out for the mortgage stays the same, but the price of utilities, food, gas, other purchases such as cars, etc go up in inflated numbers, but your wage/salary increases don't match. Sounds a little dumb.

"so-called financial advisors tell you not to pay off your mortgage because you're paying on it with "cheap inflated money.""
I agree with this approach. I think they're "right" in the investment sense but wrong in the insurance sense. You should be able to make more return than today's insanely low long-term interest rates, BUT if things turn to worms there's huge value in not having to service debt. If your investments work, you should borrow as much 5% money as they'll lend and invest in things that make a good return. Forgoing the return on that spread is like sending a check to an insurance company on a policy you hope you'll never make a claim on. Having the policy in place, though, allows you to take other risks and survive downturns and investing mistakes.

" hiding here and braced for the future."
Having some wealth and no debt gives you the freedom to go out and make some positive future if you so desire. Hiding and bracing for what comes next, IMHO, are for those with no wealth or lots of leverage. :)

Actually, the U.S. debt would be relatively simple to solve. It's about equal to one year's GDP, if we can drastically increase the GDP the additional wealth can make it more manageable.

So, how do we do this? Get the government the hell out of the way of business. Eliminate most of the regulatory load put on over the last 40 years, stop sacrificing industry to save smelt, build the damned pipeline, build power plants, burn coal, make things.

Take the vast amount of land currently held by the federal government and start slowly selling it off at a good price to people who are going to put it to productive use. Retire debt with the profits.

I said it was simple, not that it was easy -- or that anyone who believes that government is the solution will do it.

we have been debt-free for a few years, now, and
my wife, who had never experienced that since her
childhood (especially after her first husband left her
holding the bag on some of his gambling losses) --
she just jumps for joy every time it is brought up.
so, we have a little savings, some land, this house
and some gold somewhere ... but, mostly, we
have one another. . hiding here and braced for
the future.

may it treat you and yours gently, sir!!! -- j

Yes!
Like now, so-called financial advisors tell you not to pay off your mortgage because you're paying on it with "cheap inflated money." B!S! The cheap money also means that your savings are losing value, pretty much no matter what interest rate you can get, which isn't much. Anytime you have one less bill to pay is an indication that you just might be able to survive.

That's certainly true enough! However, they can't borrow a red cent right now at any interest rate.

unfortunately, it is fuel for rebellion or worse. -- j

p.s. if the union was driven out of S.C.,,, maybe
the threat of something could drive the overspenders
away? . indefatigable optimism?

And they donate millions to re-election campaigns. And they sell the story their bailout is crucial to the economy, even as some retirees begin to shift through garbage bags for sustenance. Don't know how to get out of that one.

It is also their fantasy that some budgets can be "balanced by taxing the rich corporations." This is la-la land they sell to the voting public. The U.S. deficit is $1 trillion and rising, even when interest rates are this low. But in la-la land they can generate $2 trillion if only the Koch Brothers and Google are taxed more.

yet, unfortunately, their lobbyists and lawyers are
stronger than mine. -- j

Yes, this is a problem of legal rights that are moral wrongs. A father sells his daughter to a guy in Islamo-land, and under Sharia law, she cannot repudiate the so-called "marriage". But we know that the moral right is to able to simply walk away; the law is wrong, if we can smuggle this woman out safely, we would. The problem is the very allowing of a President or Congress to create debts for the rest of us, we never consented to that.

Indeed. That's why the pain should be reduced by passing it on to bank equity holders and wholesale creditors, where the idiots agreed to buy these sovereign bonds.

X, the overspenders stole our damn money and
are now paying us retirees with yours. -- j

it's theft, buying their votes with our value. -- j

yessir, but the pain would hit people like you and me --
retirees -- particularly hard. . the effect is that the
overspenders get our value by virtue of inflation.

it pisses me off. -- j

Fascinating, VInay! . looking at Greece as a drunk
asking for Another Loan, only someone who can
afford Another Repudiation would be wise to say yes.
as a retiree, I would say no. . and it is sad. -- j

I don't have time to look it up now, but the duty of the President is given as to pay the debts of the nation. I think this is in the body of the Constitution, not in an amendment.

Bear in mind that the Communists are in power in Greece. They are highly unlikely even to try to balance their budgets, so they will need to borrow again. After they default, it will be much more expensive to borrow.

The US government issued bonds first to finance the war for independence. Next, they issued bonds for things like the Louisiana Purchase, the war against the Barbary States, the War of 1812, etc. It is only relatively recently that the government started borrowing in order to pay its everyday bills.

Why is the gov issuing bonds? (To finance a particular project.)

Why is the business of the gov to finance that project? (The individuals who support that project should finance it.)

Jan

Everyone with even the slightest training in economics knows the solution, not only to America's financial problems, but the rest of the world's. But the solution is painful. Very painful. And every day that goes by it becomes more painful. It could be compared to a disease such as cancer or an addiction. But until we are willing to submit to that great big hypodermic needle, nothing significant will happen.