I agree, Pat.  There is nothing wrong with saving and paying down debt.  We should all have been doing that all along.  However, people have not been saving - they have been just as guilty of deficit spending as our government.  But, the problem is that when the economy is bad, everyone goes into "saving" mode and it makes the economy worse.

The problem with using a government stimulus plan to give money to people who will use it to pay down debt is that it will not help the economy.  First, I don't think it would encourage more lending.  The lenders already got $700 billion and they still have not loosened the purse strings.  To some degree, they probably should be a bit more selective about who they loan money too.  Over zealous lending is what got us into this mess to begin with.

Second, even if it did sncourage more lending - it is still not helping.  Remember you said you didn't see "what was so bad about saving and paying down debt."  If people pay down their debt so more people can begin borrowing again, they are not saving - they are going deeper into debt.  In the long run, that doesn't help. 

I think we really need to create jobs so people can begin to spend what they earn, and hopefully start to save a little too.  I saw the most recent unemployment figures came out and we actually lost 2.6 million jobs in 2008.  Unemployment is at 7.2% - the highest it has been in 16 years.

I do share you concern about the national debt.  I think we might be getting in much too deep. I just hope Obama can do something about that.  I agree that deficit spending is necessary to get us out of this recession and that has to be a priority.  But, we do need a plan to get the budget balanced and start paying down the massive debt.

Best,
Robert A. Franco
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