With startling speed, we've blown right through the usual concerns about budget deficits — about their effects on interest rates and economic growth — and into a range where the very solvency of the federal government is at stake.Oh please: the America-as-Argentina is utter nonsense. Krugman is correct that budget deficits will drive up interest rates and constrict personal and corporate credit. But since the prime rate now sits at – what? – a 60-year low, I don’t think there’s a crisis in the making there.
As usual, go and read Matthew Hoy for additional debunking.