People Driving West Are Getting Closer to Falling Into the Pacific Ocean

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Saturday, 23 February 2013 08:51

That seems the obvious response to the comment by Federal Reserve Governor Jerome Powell on the prospect of the United States government facing a debt crisis:

“We don’t know where the tipping point is, but wherever it is, we’re getting closer to it.”

Needless to say, the concern seems more than a bit silly given the problem of unemployment facing the country and the fact that both interest rates and the interest burden of the debt are near post-war lows.

But hey, at least worrying about the debt keeps these economists employed and off the streets. We can think of it as being like Keynes tongue in cheek proposal to bury pound notes and then let people dig them up. It might be pointless activity, but in a badly depressed economy it still can create jobs and increase output.