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Morgan Warstler
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Morgan Warstler is now following Jen Bekman
May 4, 2011
scathew, isn't the long term bond market predicting that no one wants to own long term bonds? just asking.
1 reply
Ok, so let me get this straight... As interest rates go up, the percent of our tax revenues paying off the debt goes up dramatically. It was 30% in '85, and we could be talking about 40% with a couple ticks in interest. We're not going to ever capture more than 20% of GDP in taxes. So, as we approach Baby Boom retirement, we'll have about 12% of GDP to run the government and pay for old people. I'm not buying it. We might be seeing prices decline right now as everyone scrambles to try and stay alive, but ultimately, the government is going to print money, and DeLong doesn't really care if inflation happens. Meaning, where's his cut off point? Has he published it? If inflation hits 3%, will he throw the firs alarm and accept massive unemployment to save the accumulated wealth?
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Morgan Warstler is now following The Typepad Team
Jan 22, 2010