Tennessee Senator Bob Corker had an oped in the Washington Post complaining about the budget deficit. He concluded the piece by quoting Morgan Stanley director Erskine Bowles comment that the deficit is leading to "the most predictable economic crisis in history."
This is not true. There are many countries that have sustained debt to GDP levels of more than twice projected for the United States ten years from now. Japan currently has a debt to GDP ratio of more than 200 percent and can still borrow long-term in financial markets at interest rates close to 1 percent. Financial markets show no concern whatsoever about the financial situation of the United States, with the yield on the 30-year Treasury bond just over 3 percent.
In fact, the most predictable economic crisis in history was the crisis that would result from the collapse of the $8 trillion housing bubble. This led to both the current downturn and the large deficits that Senator Corker and Mr. Bowles find so upsetting. Of course both of them failed to see that crisis coming.