Reaching Primary Surplus: Can It Happen?

Felix Salmon waxes his moustachios, laughs evilly, sneers, and asks a question:

Felix Salmon: Monday links: Brad DeLong’s dreams of reaching primary surplus - does anybody (including Brad) really believe it’ll happen?

In 2006 and 2007 we had primary balance--and that was even with the Bush administration behaving very, very badly indeed. In 2000 we had a primary surplus of 4% of GDP. So yes, Felix, I believe we can get there. And the CBO baseline has us in primary surplus from 2012 to 2020.

So yes, Felix, with a little bit of luck and PAYGO we can get to primary balance--and then pray that it continues to be the case that g > r.

Comments

[atlasman:]

"I've had people come to us and complain, "Well, if you do that, I can't make any money." The answer is that's not my job. We're not here to help you make money. We are here to help have a system in which you will make money as an incident of your providing funds to those who will use it productively."
-B. Frank

So these are the people that will enable growth? Praying is indeed the answer as there is no way g>r under the Pelosi/Obama administration.

-AM

Jul 28 07:29 AM

[Avooch:]

Brad,

Provocative chart - it certainly is possible for us to grow out of the government deficit. A leading indicator: The Current Account Numbers are looking very good lately.

That being said, growing out of a 10% Gov. deficit is a going to take at least a decade and it will take a 40-60% devaluation of the dollar.
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Don't Get Massacred !

gudovac1941.blogspot.com/

Jul 28 08:14 AM

[robert.b.fe...:]

I have the utmost faith that government intervention will return this great land to what it once was. An Ice covered waste land barren and desolate without even a hint of profitability.

Jul 28 09:20 AM