Posted by tecwrg on 2/28/2013 12:08:00 PM (view original):
Posted by bad_luck on 2/28/2013 11:51:00 AM (view original):Are we still running a deficit?
Posted by tecwrg on 2/28/2013 11:27:00 AM (view original):Is it out of control? It seems to have leveled off over the last couple years.
How long should we pretend that an out of control spending spree on the part of the government, spending money they don't have, is OK before you finally decide it's a problem?
Most of the deficit is taken care of by a recovered economy. But it is something that needs to be addressed. I'm arguing that it should be addressed after the economy recovers so that we don't fall back into a recession when spending is cut.
Is the debt continuing to grow?
Should we have any confidence that the current president and the current congress can or will turn the deficit into a surplus, and start paying down the debt?
Can the debt continue to grow and grow ad infinitum before the whole thing eventually falls apart?
If and when that happens, will that have a positive or a negative impact on the economy?
Are you really that naive that you cannot or refuse to see that?
Yes we are running a deficit. Yes, that deficit is adding to the debt. But the deficit isn't growing. That's how you tell if spending is out of control.
Let's look at people who put their money where their mouth is--those that loan money to the federal government. What return do they get for that risk
? It's here
. Loan your money to the government for five years and you can expect a return of 0.78%. Ten years? 1.91%. Twenty
years? 2.72%. And that's before inflation.
Wow, those are terrible rates for the investor and great rates for the borrower. If the federal government was such a bad risk then interested rates would have to be higher than that. That's how we know that confidence in the government's ability to repay it's obligations is high.