|The U.S. Debt: Notice a trend?|
[click to enlarge]
He just wrote a piece in Slate proposing that the U.S. government go into even more debt, ballooning the Federal debt to even higher levels than the “mere” 120% of GDP it currently is.
His “reasoning”? To take advantage of the lower interest rates currently prevalent in the bond markets.
Prima facie, Yglesias sounds reasonable. As he rightly points out,
[T]he inflation-adjusted yield on 10-year Treasury bonds was negative 0.56 percent. Savers, in other words, want to pay the American government for the privilege of safeguarding their money. For the longest-dated bonds we sell, the 30-year Treasury bond, rates were 0.51 percent. That’s higher than zero, but far below the long-term average economic growth level. [emphasis in the original]All good up to this point.
But then in the very next breath—I mean, literally the very next line—he writes something of startling imbecility: