Do complaining U.S. deficit hawks ever think about the fact that the holders of that debt are like stockholders who clearly don’t agree with the notion that we are, as hawks frequently put it: “engaged in fiscal insanity?”
If these stockholder agreed with that dire assessment, U.S. Treasury yields currently would have to be exorbitantly high — not, as is the case now, just paying yields slightly higher than our low two percent inflation rate.
These investors aren’t forced to, they freely buy low yield U.S. securities at weekly auctions because these investors see these low yield investments as the safest place in the world to invest their money. They would not invest $18 trillion dollars in a country “engaged in fiscal insanity.”
Moreover, a nation engaged in fiscal insanity does not enjoy, as we are, either a very low rate of inflation or a stock market that has soared to new highs recently under President Obama’s watch.
Don L. Miller