02-28-2012, 10:49 PM
I still claim there's a "government bubble" that may pop.
$15 trillion GDP
$1.5 trillion government deficit that, in my opinion, is being used to prop up the economy
If, for any reason, we are forced to balance the budget, then that's a pretty huge amount of money to suddenly take out of the economy. If there is a second recession then that's certainly not going to do the deficit any favors. I believe the idea is we slowly back off the deficit spending as the economy recovers and I dunno what the plan is if there's a second recession. Considering how high our deficit spending already is, I have to imagine that "increased deficit spending" is off the table for dealing with another recession. What are we going to do? $3 trillion yearly deficit? I can't imagine.
Although I guess "bond bubble" and "government bubble" is the same thing. If people suddenly lose interest in buying US government bonds then our ability to do all this deficit spending will crash and take the economy with it.
$15 trillion GDP
$1.5 trillion government deficit that, in my opinion, is being used to prop up the economy
If, for any reason, we are forced to balance the budget, then that's a pretty huge amount of money to suddenly take out of the economy. If there is a second recession then that's certainly not going to do the deficit any favors. I believe the idea is we slowly back off the deficit spending as the economy recovers and I dunno what the plan is if there's a second recession. Considering how high our deficit spending already is, I have to imagine that "increased deficit spending" is off the table for dealing with another recession. What are we going to do? $3 trillion yearly deficit? I can't imagine.
Although I guess "bond bubble" and "government bubble" is the same thing. If people suddenly lose interest in buying US government bonds then our ability to do all this deficit spending will crash and take the economy with it.