me: >> why does the Federal government have to worry about the fiscal >> deficit? it seems that a bigger deficit could be appropriate in a >> severe recession.
Doug: > Normally not, but since the GSEs' troubles raise questions about the > creditworthiness of the USG, deficit spending to save the GSEs is a little > problematic. I don't get that. The USG's (U.S. government's) "creditworthiness" problem would seem to arise from its _failure_ to completely bail out the GSEs (government-sponsored enterprises). That is, it's supposed to stand by Freddie & Fannie. It hasn't done so as much as many think it should, undermining its credibility. But if it comes around and saves the GSEs, Wall Street would say that "all is forgiven." Right? I don't think people should worry about the creditworthiness of the US government: after all, the government's debt to GDP level was much much higher at the end of WW2. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
