DISQUS

jrbehrman · 1 year ago

The size and composition of federal debt is probably less important than the size and distribution of state/local (municipal) as well as the application, size, and structure of private, especially corporate, debt.



The main problem with composition of the federal debt is that part of it is off-the-books indemnities driving the municipal and corporate debt. This is both a hidden and compounding problem.



Otherwise, foreign holdings of Treasury paper are not a problem, so long as the world is happy holding our paper. Meanwhile, our national debt and deficits are necessary "fixes" -- in the sense of a junky-fix -- to stabilizing employment and growth.



The political problem is our Predator State: That is manifest more as a pattern than an aggregate: It is borrowing and spending that is more than just "out of control", it is "looting".