- JoiStiq117
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- Noble Legendary Member
That's all I have to say about that.
The federal deficit doesn't affect the economy for a number of reasons. First, the U.S. debt as a percentage of GDP is actually pretty normal. In addition, our purchasing power parity is high, 6th in the world, as compared to 100th for China.
Another reason the debt doesn't matter is because federal interest rates are low due to quantative easing. This stimulates investment. Some economic commentators seem to think that any day now, foreign countries are going to lose faith in the dollar, and quit investing. The problem is, they can't. The U.S. represents 11% of the economic consumption of the world. Any attempt to quit investing or buying federal debt would be economic suicide for foreign countries.