In your spare time, why not solve America’s greatest national security dilemma? Courtesy of The New York Times, you can play around with ways to solve the deficit problem. Save America from the death spiral that brought down so many empires of the past!
But, as I noted last week, keep in mind Paul Krugman’s invocation of St. Augustine: “Lord, give me chastity and temperance, but not now.” The United States can spend another $1 trillion on stimulus spending and add only $17 billion to yearly interest payments. There’s no evidence of a looming bond crisis, in which investors in U.S. debt, fearing U.S. insolvency and desiring a risk premium, demand higher interest rates, forcing the U.S. into a death spiral. And there’s no evidence that indicating future reduced taxes will boost business confidence and cause banks to lend again. Here’s Krugman making the case after the June G-20 summit earlier this year:
And in the interest of equal time, here’s Niall Ferguson giving the other side:
