By Simon Johnson
If you honestly believe that investors will happily buy up any amount of US government debt (at low interest rates) for the indefinite future, then relax. The tax deal passed yesterday should make you happy.
But if you fear that the US will soon be tested by financial markets – just as the eurozone is being tested today – then please read my column,”Voodoo Economics Revisited“, which is now on the Project Syndicate website. There is a well-established tradition in the Republican Party of thinking that tax cuts cure all ills; many in the Democratic leadership have apparently now fallen into line. We need to think hard about what our fiscal crisis will look like – and who will end up being hurt the most.
Another link to the column: http://www.project-syndicate.org/commentary/johnson15/English