We Have Crossed the Line Debt Hawks Warned Us About for Decades

davfor

The debt of the United States now exceeds the size of its gross domestic product. That was considered a doomsday scenario that would wreck the economy. So far, that hasn’t happened.

Here is one explanation for why that hasn't happened yet.....

.....since the 2008 financial crisis, traditional thinking about borrowing by governments — at least those that control their own currencies — has further weakened, as central banks in major developed markets became enormous buyers in government bond markets.

“Fiscal constraints aren’t nearly what economists thought they were,” said Daniel Ivascyn, chief investment officer for PIMCO, which manages nearly $2 trillion in assets, mostly in bonds. “When you have a central bank essentially funding these deficits, you can take debt levels to higher debt levels than people envisioned.”

https://nytimes.com/2020/08/21/business/economy/national-debt-coronavirus-stimulus.html

WABAC

The only thing we're arguing about these days is who gets all the free money. Plain old people, or plutocrats who will theoretically deploy the money wisely to create jobs for plain old people.

The former are called socialists. The latter are called capitalists.

What a hoot.

royal4

Yes, yes,,,those capitalist and trickle down economics... been around for years and years an years... we should all be billionaires by now.

Old_Joe

Seems to me that trickle-down is more like piss-on.