Tuesday, February 22, 2011

Politicians v. The Real World

Whaddya think the chances of this are?

...[it's common among politicians of both parties.] There is a prevailing belief that the interest-rate environment will remain stable, that inflation will remain low, and that we can continue to place our debt at low rates of interest.

Not to mention "grow" the economy at more than 4%/year over the next 3-5 years or longer.

Uh-huh.

And you thought all the dope-smokers are sleeping in the Capitol building in Madison...

Monty/AOSHQ

7 comments:

J. Strupp said...

"....interest-rate environment will remain stable, that inflation will remain low, and that we can continue to place our debt at low rates of interest."

1. This is not a common belief of both parties. Most Republicans believe that we're somewhere between Ireland and Zimbabwe (closer to the latter) in terms of inflation expectations and, therefor, future interest rates that Uncle Sam will be paying on it's debt. There's no evidence to support this claim mind you, but that's what they believe.

2. Historical and current data SUPPORTS the claim that the, "interest-rate environment will remain stable, that inflation will remain low, and that we can continue to place our debt at low rates of interest." In fact, current interest rates and inflation expectations (as indicated by the yield on the 10 year, TIPS spreads, y-o-y core CPI, etc.) are currently lower than recent levels so one could argue rather effectively that short and medium term interest rates on U.S. debt obligations and inflation expectations could be lower than average for an extend period of time in the future.

Of course, this data doesn't matter because you went to the store and bought Roma tomatoes for a buck more this week than last week. Obviously, Roma tomato prices are a much more efffective tool in determining that we're on our way to Zimbabwe-like inflation and exploding yields on treasuries.

Dad29 said...

Roma tomato prices are a much more efffective tool in determining that we're on our way to Zimbabwe-like inflation and exploding yields on treasuries

Glad to know that you've finally passed Econ 101!

Do Geithner and Bernanke also believe that world events and the number of 'willing buyers' have any impact on rates?

Realists do. Bond prices DO drop after issue, you know.

Anonymous said...

"And you thought all the dope-smokers are sleeping in the Capitol building in Madison..."

Hey, more partisan yuks. Thanks, Dad29, for generalizing public sector workers who are exercising their Constitutional rights. It must really bother you when these "pot heads" put democracy into action, as opposed to shutting up and doing what they are told. Ah, yes, bring back the good ol'days!

Anonymous said...

I want to rape Capper.

Anonymous said...

Dad29, please get rid of this crap at 4:02 p.m.

UNACCEPTABLE!

John Foust said...

Anyone care to guess whether 4:02 is a conservative or a liberal?

Anonymous said...

I'm a moderate, John Foust.

And it's still there. Dad29 is just being stubborn...and not a Christian.