On Apr 27, 2009, at 11:37 AM, Politicus E. wrote:
> I disagree. It is a slippery slope
"Slippery slope" is often a lazy bullshit argument.
> from the assertion "you can't keep
> running deficits of 6-7% of GDP indefinitely" to the claim "the
> stimulus
> should be withdraw." An important foundation of the present
> communications
> strategy of the Republican party is precisely, of course, moving
> from the
> view that the federal government can't keep running these deficits
> indefinitely to the conclusion, for example, that stimulus is not
> needed.
Only an idiot or a liar would equate the two positions.
> My comment about Ricardian equivalence was an attempt to get you to
> disclose
> your theoretical position on this. What is your argument? Is your
> position
> neo-Keynesian along the lines of DeLong? You buy into some variant
> of the
> quantity theory of money?
I don't get what the quantity theory has to do with this. But, in any case, a deficit of 6-7% of GDP every year for practically ever means that the debt burden will grow to enormous levels in a rather short period of time. Debt service will take up a growing portion of the gov's revenues, and, at some point, creditors will refuse to roll over the debt. You would then hit a wall and things would really start to suck.
What's your view, Wise Man With the Latin Name? You can keep running 6-7% deficits forever?
Doug