The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.
But that happy situation, aided by ultralow interest rates, may not last much longer. Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.[…]The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.
“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”
But Nobelist Paul Krugman calls it The Phantom Menace.
Still -- a tad scary, I supposed, when one realize a simple thing. It’s not only that we’re not saving nuts, or munching the bad ones left from last winter for that matter, but that we’re also giving “our” nuts away …
See -- there’s also Jon Boone in Kabul with more worrisome news from Afghanistan. He’s reporting that we are pouring millions into anti-Taliban militias in Afghanistan (Guardian | November 22, 2009). Apparently the Special Forces are funding fighters in Afghanistan and there are fears the strategy could further destabilize Afghanistan. “According to some western officials, the US government will make a pot of $1.3bn (£790m) available for the programme, although the US embassy said it could not yet comment on CDI.” He also writes that “senior generals in the Afghan ministries of interior and defence are also worried about what they see as a return to the failed strategies of the Soviet Union during its occupation of Afghanistan.”
Wait, wait a minute! Didn’t the we armed the somebodies out there in the 1980s against the Soviet occupation? What? We're not supposed to talk about that? The Guardian also reports that “in return for stabilising their local area the militia helps to win development aid for their local communities, although they will not receive arms, a US official said.”
How sure are we that they will not turn their aid money into arms to shoot at our guys?
This is just so, so confusing.
But I do feel sorry for squirrels like us. Are we ever going to enjoy our nuts again in peace like normal squirrels? Or is this as good as it gets?
