December 09, 2012
The fact that the United States can borrow long-term at very low interest rates indicates that actors in financial markets are not concerned about large U.S. budget deficits. Odds are that these people recognize that the large current deficits are the result of the economic collapse that followed in the wake of the bursting of the housing bubble. They probably also know that if the deficit were smaller it would just mean slower growth and higher unemployment.
Given this reality, it is interesting how the Post could know that:
“$4 trillion in deficit reduction over the next decade [is what] both sides believe is necessary.”
We all know what the politicians in both parties are saying, but of course politicians often do not say what they actually believe. It would be interesting to know how the Post has determined what the leadership of the two parties actually believe about the economy.
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