The advantage the United States enjoys is that, unlike Greece, it can print the in which its debt is denominated. But, even so, it still needs someone to buy it. The failure of Germany’s bond auction on Wednesday suggests that the world is running out of buyers for Western sovereign debt at historically low interest rates. And, were interest rates to return to their 1990–2010 average (5.7 percent), debt service alone would consume about 40 percent of federal revenues by mid-decade. That’s not paying down the debt, but just staying current on the interest payments.
And yet, when it comes to spending and stimulus and entitlements and agencies and regulations and bureaucrats, “More more more / How do you like it?” remains the way to bet. Will a Republican president make a difference to this grim trajectory? I would doubt it. Unless the public conversation shifts significantly, neither President Romney nor President Insert-Name-of-This-Week’s-UnRomney-Here will have a mandate for the measures necessary to save the republic.
Saturday, November 26, 2011
'More More More'