Here’s why I’m suspicious about the sincerity of politicians offering to deflate the dollar and pressure for sane interest rates. The main mob of constituents for both political parties is now comprised of government employees, other recipients of government incomes and services that value them as customers.
They prefer to keep the debt regime going as long as possible. They keep the illusion going in fearful bond investors that the debt might be paid with cheapening dollars and hope that more revenues will paid with increasing amounts of cheaper dollars.
IMO, the majority of constituents will continue to push government to inflate the dollar and keep rates insanely low. Higher bond yields would make bond investors even more fearful, as government would be less likely to pay toward the debt as long.
More information is welcome here, though. I have very limited knowledge, and it’s a mess of a puzzle.
This, of course, has historically been the way governments have dealt with excessive debt. Historically, governments fall if it lasts very long.
yitbos
The US (as you have observed) has become a creditalist country, not a capitalistic one.
http://www.youtube.com/watch?v=iquemUNNYY8&list=UU8eFERtcxPZ-M3Cxkh7zhtQ&index=8&feature=plcp
http://www.freerepublic.com/focus/f-news/2929152/posts