[quote][b]Posted by:[/b] A Good Troll [quote][b]Posted by:[/b] Mr Libertarian There has been no proof over economic growth and stimulus. Why? Because art.boom = art.bust + the new amount of debt (or inflation) that the country receives.[/quote] In the short run, sure the growth exists. As you said, if the government borrows a dollar, the cost of that dollar is the initial principal plus whatever interest will be paid on that dollar. Current ten year T-Bill rate is 1.625% - simple interest, not compounded. The simple interest cost for that ten year T-Bill $1.1625. So, your money multiplier has to exceed 1.1625 in a zero inflation environment to be worthwhile - and this ignores any positive benefits to society or efficiencies created (i.e., infrastructure spending). Realistically, it would be illogical to pay down debt in the interest rate environment we have. The debt is too cheap and is basically free (probably negative - average inflation rate in the US over the past century is about 3%) once you factor in inflation costs. If I had access to ten year loans at 1.625%, I'd take out every single dollar someone was willing to give me.[/quote] When I say economic growth, I ment overall. I'm not going to lie and say that low articificial prices makes booms, however, once money is circulated, inflations, rising prices...etc. Your idea is correct on borrowing and lending, but pragmatically it will not work because of taxing, we burden the region, or in inflating, we increase the money supply, or by just borrowing, which we will have Crony Capitalism. I see that the inflation rate is 2% at the moment (we are not talking about any of the QE conferences.) Yet since 95% of the dollar value has been lost. A dollar in 1913 would be $20 here.