Quote:
Originally Posted by CPHoya
I understand what you're saying, but what you're saying is an enormously complicated proposition that you've raised before that I would note (1) is only sort of true, (2) requires significant management and limiting to be workable, and (3) seems to assume that because the government "can deficit spend forever" (itself actually a dubious claim) it can deficit spend in any amount forever without any negative consequences. And that is obviously wrong, unless you posit that U.S. monetary policy is immune to external influence and that U.S. citizens are not negatively impacted by inflationary spirals, which is crazy.
Not really saying any of that as the amount that the US can borrow is obviously not unlimited. But it's just as obvious that the US is probably not too close to that limit, given current low interest rates. I have no idea if the US government should borrow more money or less, as you say it is an enormously complicated question. But then the other side of that coin is I think it is appropriate to be skeptical of people saying it is obvious that the US government is currently borrowing too much money.
So yes, I agree that (1) it is only sort of true [but probably interest rates will let us know if we get too far out of line] and (2) it requires management and limiting [and interest rates will be a cue for us to adjust].
So then (3) is a straw man, since of course there is some level of deficit spending that would negatively impact the cost of borrowing for the US government. The question I'm asking is simply, given current interest rates, should the government be borrowing more money right now? As you say, that's an enormously complicated question and at the low low rate of 2.2% I'm not sure that the answer is entirely obvious. Particularly when you compare the US debt to GDP ratios currently found around the world and see that they're pretty much right in the middle of the developed world.