Comments on: Perspective on Fiscal Policy

By: Lord

Lord — Wed, 18 Dec 2013 21:17:58 +0000

Not when the Treasury is issuing more long term debt to take advantage of it. You can’t look at the Fed actions independently of the Treasury.

By: Bryan Willman

Bryan Willman — Wed, 18 Dec 2013 04:19:35 +0000

10.3% of all future US GDP? So Kotlikoff claims to know what US GDP will be in the year 2750? And that the US will exist in that year?

A 37% reduction in spending or a 57% increase in taxes, immediately? Does any credible person think this will produce a functioning economy? That it would it fail to produce something akin to civil war?

And in any case, the entire discussion is about accounting for “money” which while very important is not the same as real output.

By: Mogden

Mogden — Tue, 17 Dec 2013 21:20:56 +0000

But Krugman says we’re being starved to death by austerity. Who is right?

By: Chris

Chris — Tue, 17 Dec 2013 18:31:08 +0000

“Closing this gap is imperative” because…why?

By: Arnold Kling

Arnold Kling — Tue, 17 Dec 2013 15:24:52 +0000

If you think of the Federal Reserve as part of the government (which you should), then the maturity of the debt is shortened, not lenghtened, by the Fed’s purchases of long-term debt.

By: Lord

Lord — Tue, 17 Dec 2013 15:17:44 +0000

Then there is Karl Smith:
The burden of our Federal Debt is as low as it has been in decades and is still shrinking. The federal debt is fairly large compared to historical norms. However interest rates are low and the government is locking in those interest rates over a longer and longer horizon. The combined actions of the Federal Reserve and Treasury are pushing the average maturity of the debt out to record lengths.