Off the Deep End
We aren't deficit scolds, but these levels are uncharted territory, especially if any economic recovery is weak because the spending doesn't stimulate. The new spending means new federal debt in the trillions of dollars over the next few years, which will test the limits of America's credit-worthiness. To the extent that taxes rise to pay for it all, the U.S. will become less desirable as a destination for the world's capital. Perhaps the Federal Reserve will try to inflate away this growing debt, but the world's bond vigilantes will get a vote on that.We recognize this bill is going to pass as early as today. But Americans need to understand the vast expansion of government they are getting -- and who voted to pass it.
3 Comments:
I have not seen an analysis yet of who is providing the financing for all of America's new debt. Maybe it would be quite enlightening to see who is lending us money, whether that credit is likely to dry up, and whether they are even people we want to be borrowing from.
I agree with the sentiment, but 30 years seems like an awfully short baseline for this kind of thing. There are numbers going back much longer aren't there?
Ben,
The only way that the "credit is likely to dry up" is when the rest of the world stops seeing the United States as a safe, stable place to invest.
We're nowhere close to that point.
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