At 12:19 PM 2/16/99 -0500, you wrote:
>
>> Doug wrote a few years ago in LBO that government debt
>> was one way that
>> capital, in the form of bondholders, objectively
>> limits the options of
>> government. You seem to be saying that all that
>
>I agree this is a factor. Our history since 1981
>makes that pretty obvious.
>
>> matters is mindset --
>> that if the democrats were a social democratic party
>> with a big majority,
>> they could have done big social investments 8 years
>> ago, and if the
>> spectrum of social thinking is the same in 20 years as
>> it is now, then
>
>Also a factor, maybe a bigger one, is the sentiment
>on behalf of public spending. Our present situation
>makes clear this is an essential ingredient, since
>the deficit obstacle has fallen away entirely. Specters
>of future deficits can always be hoked up by somebody
>who is hostile to government spending. This is possible
>now because of insufficient enthusiasm for new spending.
>
>> such spending will be impossible spending will be seen
>> as impossible if
>> the debt is zero. So whether interest payments take up
>> 10% of the budget
>> or zero is irrelevant? It's all purely a matter of
>> perception and
>> political will?
>
>I don't think we know if political will is all that is
>required. If it is, then there is less reason to pay
>down debt now. Even a tax cut would be better.
>
>mbs
>
>
>