Two Perspectives on Deficits and Debt
First, from columnist Steven Pearlstein
Two trillion dollars sounds like a lot of money, but in a pinch we could pay it all back in just one year if we were willing to reduce household and government spending by about 15 percent. It would require temporary sacrifice on everyone’s part but would hardly be the death of the American dream.
Second, from economist James Hamilton.
If I want to know what an additional trillion dollars in government borrowing or spending will mean for me, I just imagine what it would be like to pay twice as much in federal income taxes for one year.
Pearlstein says we should be happy that the government is doing so much borrowing, because this offsets the rapid de-leveraging of the private sector. I have to admit that my jaw dropped when reading a number of passages in this column.
Ronald Reagan was once called the Teflon president, because nothing bad ever stuck to him. But Obama is the real Teflon president, as Bryan pointed out.