Quote:
Originally Posted by Tyrone Slothrop
No, it isn't. The debt is not bad when compared to GNP, especially when you consider how low interest rates are. Pushing interest rates higher will make the (same amount of) debt more expensive.
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I assume you're referring to the projections arguing the yearly debt service will only be 4-5% of GDP by the end of the decade. If so, you're right. But those are projections. They assume normal economic growth between now and then.
Suppose the growth in that period instead remains abnormally depressed? Suppose we've only 80% of the projected GDP? I'm not going to go through the exercise of listing all the possible negative events that could radically change how much we spend on debt service, but it could just as easily wind up being 10-15% of GDP.
