, Columnist
Investors Are the Guinea Pigs in U.S. Fiscal Experiment
How long can this borrowing binge go on before it matters to the credit-ratings firms and global investors?
Congress is looking for some guinea pigs to carry out a test.
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In a span of less than two months, the U.S. Congress passed substantial tax-reduction legislation and agreed to a major increase in federal spending. Estimates are that the U.S. Treasury will at least double its debt sales this year to more than $1 trillion to make up for the lost revenue from the tax cuts and pay for this extra spending.
How long can the U.S. go on this borrowing binge before it matters to the credit-ratings firms and global investors? And does it matter at all?