Stable genius and loyal acolytes

HHusky · May 26

“In a short amount of time,” economist Larry Summers recently told The Atlantic, “the fiscal picture has gone from comfortably in the green-light region to the red-light region.” As the headlines suggest, a key trigger for this angst is the legislation that passed the House this week. Global investors in U.S. debt are learning how many trillions the GOP’s bill is likely to pile on to the already swollen deficit (since it’s a work in progress, we don’t know the number yet, but my analysis suggests something in the $5 trillion range).

The Wall Street Journal’s chief economics commentator Greg Ip noted that the deficit implications of this budget “would be higher than any other sustained stretch in U.S. history, and more than almost any other advanced economy. … Before 2023, [U.S. deficits] accounted for half of advanced economies’ deficits, according to the International Monetary Fund. From 2023 through 2030, it will be two-thirds.”