Government Deficits

Jerry Bower at TCS Daily explains why deficits aren't such a bad thing, and in actual fact are a GOOD thing. Among other things, they funded our independence. And we've never payed it all back, either, although he doesn't make the point that we can roll it over (issue new bonds to pay off the old ones). And he has a handy chart, showing the deficit as a percentage of the economy.

"When strong nations go to war, they borrow money. Weak nations, not so much. That's because strong nations usually win, and winning nations usually repay their creditors. Rich and successful people don't have any problem getting someone to loan them money. The same holds for wealthy and successful nations. That's why, historically, the interest rate of a nation's bonds is a pretty good inverse indicator of investor confidence in the war effort. The more trouble investors see on the horizon, the more compensation they demand for the added risk."

You'd think he was over reading this guy.