Econowonk

This is interesting:

The [International Monetary Fund] estimated a series of probabilities regarding the amount of increased debt a country might be able to sustain without hitting its projected point of no return.

That seems reasonable. International financial institutions like the IMF, and the World Bank, crank out "what if" scenarios all the time. The strategic planning groups within large corporate banks, and major non-bank corporations, do so, too -- or, hire outside firms to provide those same projections.

In the case of the U.S., the [IMF] said the odds were roughly three out of four that the country could increase its total debt to some degree without being penalized by investors -- logical considering that the debt is steadily increasing and interest rates remain low and steady.

However, that probability falls to an even 50-50 if the amount of new borrowing were to exceed fifty percent of GDP - or about $7 trillion given the current, $14 trillion size of the U.S. economy.

What this says, publicly, is that there is still room for the U.S. government to spend modest amounts of money (borrowing it from the Treasury at very low interest, meaning we don't have to sell more Treasury Bonds to the Saudis and Chinese to pay the interest on it), which might provide additional economic stimulus, without creating a real problem. It's a signal from the International monetary community: Do something.

The problem is, the Rethugs are resurgent, and intent on destroying the current President so that we can have a Huckabee-Palin team running the country in 2013; they will never allow any further stimulus spending, no matter how much it hurts large numbers of people -- 'cause it's Tough Love, and that's just what America and Americans need.

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