Thursday, March 14, 2013

The Republi-CON U.S. Government Deficits = Higher Interest Rates Myth

For years Republi-cons have claimed that "government borrowing would bring on the bond vigilantes and send rates soaring."  Of course,  nothing of the sort has happened.  Why?

Because "negative real interest rates are the natural state of things in the United States — and with the exception of the 1980s, history seems to bear him out on that — then we don’t have to worry about ever-rising debt-to-GDP ratios. If [that is] right, then ever-rising debt ratios in such a scenario are literally impossible."

Read the Washington Post,  Washington hates deficits. Why it hates them is less clear.