Hatchet job no way to solve long-term debt problem
I heard another politician ranting about the evils of our national debt. He warned against the legacy we would be leaving our children, etc. His solution – cut government spending (which cuts middle-class spending) but didn’t mention its effect on current economy.
I noticed the current 10-year Treasury bill interest rates are going for 1.9 percent. (That means someone is willing to loan money to the U.S. government at that rate.) The 10-year U.S. municipal bonds (local and state) are going for 1.86 percent.
The average inflation rate for the last 10 years has been 1.8 percent.
Hum, if our national debt is such a horrible thing, why are people willing to loan that same government money for free? If I had a huge debt problem, would the banks loan me money at zero interest? I don’t think so.
The national debt is a long-term problem requiring long-term solutions, not austerity hatchet jobs like cutting the social safety nets.