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Politics : American Presidential Politics and foreign affairs
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To: TimF who wrote (36023)7/20/2009 11:23:19 AM
From: DuckTapeSunroof  Read Replies (1) of 71588
 
Re: "the absolute size of the debt isn't what's important its how affordable it is."

Since long-term interest rates can, (& frequently do!), shift around violently, making unpredictable the 'carrying costs' of long-term debt... I assume that what you must mean when you talk about the importance of 'how affordable a level of debt is' is what percent of real GNP it represents.

(I would agree with that and only add the reminder, as Reagan was so fond of arguing: a fast *rising* rate of growth in GNP will erase a multitude of sins. Making most everything else possible... paying off debt not the least of that.)

There is a WORLD of difference between GNP growth rates like 8%, 9%, or even 10% (the likes of which India and China see)... and even between 2% and 3.5% (ranges the largest economy in the world, the US, has variously seen), and 1% or 0%... like Europe or Japan.

WORLD of DIFFERENCE in what that means for the long-haul.
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