Megan lays out why neither Barack Obama nor John McCain will able to spend a red cent. Repealing those Bush tax cuts ain't gonna do it anymore. If Obama gets elected, he'll take office just as tax revenues plummet.
She also argues that ...
So -- couldn't McCain or Obama just borrow more?
As Megan explained it to me, the flight to quality has pushed down the value of T-bonds -- when they recover is unknown -- and continued concerns about the financial system might increase the borrowing costs. Who's going to want to lend us money
Update: an ornery reader writes:
The value of treasury bonds is going down not for the government which issues them but for those buying them. Interest rates are going down because so many people want a reliable place to put money that they are literally willing to pay the federal government to hold their money, hence negative interest rates. In short, the answer to your question <i>Who's going to want to lend us money?</i> if by "us" you mean the federal government, is everyone, because its a lot less likely to fail than banks right now.
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