February 01, 2016
What else is new? Yep, the deficit is exploding and it will devastate our children and no one will listen:
“Based on the campaign so far, this important conversation seems unlikely. The leading candidates are playing Russian roulette with the nation’s future, assuming that deficits can be ignored because most Americans (or so it seems) would prefer it that way.”
Folks who pay attention to the economy might notice that the interest rate on 10-year Treasury bonds is now under 2.0 percent. Apparently it’s not just the politicians, the financial markets are not too concerned about the deficit either.
As far as the burden on our kids, interest on the debt (net of transfers from the Federal Reserve Board) comes to less than 0.8 percent of GDP. By comparison, interest payments were over 3.0 percent of GDP in the early 1990s condemning us to a decade of stagnation. (Oh wait, doesn’t seem to have worked out that way.)
If we are concerned about helping our kids, how about running larger deficits to employ their parents? More spending on infrastructure, education, health care and other needs would help to make the labor market tight enough so that workers have the bargaining power they need to get higher wages. It would also make the economy more productive in the future.
The risk to our children from having parents without the ability to care for them dwarfs any risk they face from higher interest payments on the debt. But hey, without Robert Samuelson they might not even have someone to tell them about the debt.
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