When interest rates are close to the rate of economic growth, Gagnon continues, you can run a budget deficit forever as long as the primary deficit is balanced. The debt load as a share of the economy won’t increase over time. And if interest rates are lower than the pace of growth — as they are now — the load will actually shrink while you run those smaller deficits.
we have a situation in which a terrorist may be about to walk into a crowded room and threaten to blow up a bomb he’s holding. It turns out, however, that the Secret Service has figured out a way to disarm this maniac — a way that for some reason will require that the Secretary of the Treasury briefly wear a clown suit. (My fictional plotting skills have let me down, but there has to be some way to work this in). And the response of the nervous Nellies is, “My god, we can’t dress the secretary up as a clown!” Even when it will make him a hero who saves the day?
A new CBS poll says virtually no one thinks the deficit or the national debt are the top problems facing the country.
From Talking Points Memo
Not surprised one bit. I’d be willing to bet that the tea-party folks most vocal about debt, deficit and taxes are no more knowledgeable on those topics then a sampling of random registered voters.