Question: Is debt a fact of life?
Should we accept debt as a necessary evil of living in the 21st Century?
I’m not arguing in favor of debt, but raise the question since debt is such an integral component in today’s economy.
Consumption is funded by debt.
Government spending is funded by debt.
Cash is not king in the land of the plastic master.
Nearly everybody would argue for as little debt as possible. There isn’t much good about debt.
But what about some debt?
What about the use of debt in producing profits that exceed the interest, particularly in business?
What about the use of low-interest debt to fund higher-interest investments?
These are real-life questions.
It’s easy to talk theoretically about going “all cash” or spurning all debt. But as I go about my day-to-day life, it seems a bit unrealistic.
Not that I plan to hold onto my current debts. I still intend to pay them off as quickly as possible.
But once they are paid off, I can’t see myself getting rid of credit cards entirely. And from a business and investment perspective, I can’t see myself not using debt if it can be used to gain a financial advantage.
How about you? What are your thoughts?
[Here’s a related post I wrote in October 2007: Is There Such a Thing as Good Debt?]