We are doomed

Matthew Hoy
By Matthew Hoy on June 28, 2011

Former Bush 43 economic policy adviser Lawrence Lindsey points out in today’s Wall Street Journal that our economic situation is actually worse than it’s made out to be.

First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.

The 10-year rise in interest expense would be $4.9 trillion higher under "normalized" rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.

GOP Presidential contender Tim Pawlenty has set a goal to get the U.S. economy growing at 5 percent, a rate not seen since the Reagan administration. He’s been called unrealistic (and various other sundry names) by the political left—despite the fact that Obama administration estimates have the economy growing at a 4.1 percent clip. Apparently the difference between reasonable and wacko crazy is nine-tenths of a percent.

What’s going to happen when the economy begins to recover? Whether it’s Obama’s 4.1 percent or Pawlenty’s 5 percent, or even something more modest in the 3 percent range? Will interest rates begin to rise? The numbers can’t stay so close to zero forever.

I’m beginning to think that the light at the end of the tunnel (Obama’s defeat in 2012) may just be an oncoming train.


SEN. LANKFORD: "Can you help me get a good definition of 'birthing people?'"

BECERRA: "We're trying to be precise in the language that's used."

SEN. LANKFORD: "Mom is a pretty good word. That's worked for a while."

Ummm...who elected her? Is there something wrong with the guy we did elect? What do we pay the FLOTUS? A "United States government official"?

Jill Biden@FLOTUS

Prepping for the G7.

One of the most frightening articles I've ever read.


So, @SLOTribune columnist and local Democratic party apparatchik Tom Fulks was on local radio last night and told listeners that the difference between the Democratic and Republican parties is that the Democratic Party wants to help people and the GOP wants to hurt people 1/

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June 2011



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