Markets will punish government profligacy

By Paul Casto

In this article from Reuters, the head of the European Central Bank predicts that irresponsible governments will have to pay higher interest rates when they borrow.  Trichet is warning that other European nations could follow Greece down the slippery slope, but the same applies to the United States.  This is what John was talking about in “An All Consuming Interest” (posted April 23).  It’s hard to imagine how we would pay interest of a trillion dollars a year, when we’ve only been collecting $2.2 trillion in taxes. 

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