The Answer Is Politics

[Procrustes Stretched]

Interesting comments by...

Let's talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn't the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met - appropriately - with temporary measures to stimulate growth and support employment.
The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

But there's no reason to panic about budget prospects for the next few years, or even for the next decade.

.

Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they'll have risen to 3.5 percent of G.D.P. How scary is that? It's about the same as interest costs under the first President Bush.
Why, then, all the hysteria? The answer is politics

Krugman

 

[Procrustes Stretched]

What would he do?

Interesting comments by...

Let's talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn't the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met - appropriately - with temporary measures to stimulate growth and support employment.
The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

But there's no reason to panic about budget prospects for the next few years, or even for the next decade.

.

Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they'll have risen to 3.5 percent of G.D.P. How scary is that? It's about the same as interest costs under the first President Bush.
Why, then, all the hysteria? The answer is politics

Krugman

 

[Neubarth]

When you consider that we are effectively NOT paying interest on any debt that the FED buys, everything is coming up roses.

The FED quite frankly was the greatest invention since sliced cheese.

 

[The Rabbi]

Well, several things wrong with the OP.
For starters, a lot of that interest in going overseas, rather than being paid to Americans.
Second, it assumes that interest rates remain low. That is unwarranted. A moderate rise in rates would boost the debt service quite a bit.
Finally, Dante wrote. So almost by definition it is wrong.

 

[Procrustes Stretched]

When you consider that we are effectively NOT paying interest on any debt that the FED buys, everything is coming up roses.

The FED quite frankly was the greatest invention since sliced cheese.

Cheese comes sliced?


who knew?

 

[Neubarth]

When you consider that we are effectively NOT paying interest on any debt that the FED buys, everything is coming up roses.

The FED quite frankly was the greatest invention since sliced cheese.

Cheese comes sliced?


who knew?

It is called American Cheese for a reason. The Fed is American cheese. Without it we could not exist. Can you imagine having to borrow from a real institution? They knew what they were doing when they created the Fed. Thank God. Stupid shits do not understand what the Fed gives us when it comes to borrowing. Because of that, the United States still exists.

 

[Neubarth]

Well, several things wrong with the OP.
For starters, a lot of that interest in going overseas, rather than being paid to Americans.
Second, it assumes that interest rates remain low. That is unwarranted. A moderate rise in rates would boost the debt service quite a bit.
Finally, Dante wrote. So almost by definition it is wrong.

Oh learned man of the sacred scrolls, the interest that we pay over seas has a determined purpose. with it we create a concerted interest in keeping the value of the dollar up. Hence the value of the Yuan is pegged to that of the dollar. Funny how that all works, but is works swell.