Why we love the D.R.

SantiagoDR

The "REAL" SantiagoDR
Jan 12, 2006
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In the NEWS, October 28, 2009

Montas defends debt

Minster of Economy, Planning and Development Temistocles Montas is defending the government's increasing debt by saying that its overall purpose is to stimulate the Dominican economy. Montas added that the government would continue taking on debt as a strategy in the face of the international crisis. He added that the government could not just stand by helplessly.
Can you imagine what would happen if everyone used Dominican strategy!

Hey!

I maxed out my credit cards!
Give me some more credit cards!!!!!!

Okay, I'm not an economist, just how does that work?
 

pedrochemical

Silver
Aug 22, 2008
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In principle taking on more debt causes problems later for the individual.
Nations are different.
I just saw on the BBC that Italy has debt repayments of 110% of GDP.
Was this a typo on the newscaster's script??

Leverage is like whiskey.
There is a fine line between just enough and too much.
And like whiskey by the time you think you have had enough you have had probably had too much.
As long as you invest the money you borrow wisely then the current cost of borrowing makes it worthwhile.
Put it like this - with interest rates as they are I would be borrowing, not saving, if I had the need.
 

A.Hidalgo

Silver
Apr 28, 2006
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For established capitalist economies like the US, Britain, France, Japan etc this is standard operating procedure, for developing economies like the DR, I'm not too sure. Economist here please contribute.