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View Diary: Krugman: Dwindling Deficit Disorder (135 comments)

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  •  But if we stay in deficit? (1+ / 0-)
    Recommended by:
    Sparhawk

    If we stay in deficit then the borrowing the gov't did at low rates will have to be rolled-over into whatever the new, higher rate is though, right?

    Imagine that in March 2018 you have $50B borrowed at 2.5% coming due, but you're still running deficits.  At that point don't you need to pay back that $50B and then borrow that $50B again but at whatever the current rate is?  What if the rate is closer to the historical norm, say 5%?  Then in April 2018 you have to do the same thing, and every month after that.  Servicing the debt would become much more expensive, wouldn't it?

    •  That is why the Krugman plan is to borrow (5+ / 0-)

      cheaply now to invest in what will build up the economy so that taxes on increased incomes will result in paying down the debt later.

      Education and infrastructure, not the military and corporate subsidies.

      All of this assumes that we can get away from Republicans creating massive deficits at every opportunity in order to Starve the Beast. To them, the Beast is anything that helps anybody other than the rich and the racist pseudo-Christian allies of the rich who can be induced to vote against their own interest "because Blacks get hurt worse," in the words of Southern Strategist Lee Atwater. Programs for the poor, financial regulation, consumer product safety, environmental protection, renewable power, science, Medicare, Social Security, Medicaid&ellip;

      If they were serious about wanting people to be "makers", making enough money to pay income taxes, they would be helping to rein in corporations and empowering labor unions, and would fully fund education and other anti-poverty programs. Then we could cut the programs after poverty is eliminated. Which brings us back to borrowing at the current spectacularly low interest rates.

      Ceterem censeo, gerrymandra delenda est

      by Mokurai on Mon Mar 11, 2013 at 09:17:32 AM PDT

      [ Parent ]

      •  The plans is never anything other than spending (1+ / 0-)
        Recommended by:
        elwior

        And its not a plan of "lets do this now and then change it later" its a plan of "lets do this now with justification X, and then do it later with justification Y" or "lets do this now, and we'll change it at some undefined later which never arrives"

        Krugman (and I suspect others) know that once you start spending, you don't ever stop.

        Then we could cut the programs after poverty is eliminated.
        aka never.
    •  Pay down debt in good times (2+ / 0-)
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      elwior, VTCC73

      As our government was doing in the 90's, right up until Bush II was selected.

      It is an old strategy of tyrants to delude their victims into fighting their battles for them. FDR

      by Betty Pinson on Mon Mar 11, 2013 at 11:20:14 AM PDT

      [ Parent ]

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