I’m not very comfortable talking about policy because I know enough to know that I wouldn’t really know what I’m talking about. Further, I don’t want to turn this into another episode of Paul Krugman is right, everyone else sucks. But can someone answer these questions for me:
1. The Village/Republican critique of stimulus spending is “oh noes, the national debt”. Is there any legitimate reason why these proposed tax cuts do not provoke a similar reaction?
2. The reason why “oh noes, the national debt” supposedly makes sense is that an increasing debt may prompt the bond vigilantes to up the interest on T-bills. Krugman points out “The 10-year bond rate was over 3.7 percent when The Journal published that editorial; it’s under 2.7 percent now.” I understand that excessive national debt is problematic, don’t get me wrong, so that’s not what I’m asking. What am I asking is: is there any evidence that US debt will be hit by these bond vigilantes? If so, what are they waiting for?
Update. And one final question, a bit darker: is the Obama administration so deeply in the grips of irrational Village economic “ideas” that we are all fucked?