>>"When does deficit spending become "unsustainable?"
When government has made promises it will not be able to deliver on. Social Security and Medicare are heading into a pool of red ink. The days when the population of wage earners was significantly larger than the population of retirees are over, and they're not coming back. Demographics are not working in our favor.
The generation of wage earners following behind the baby boomers is not going to be able to pay for the bulge in retirees AND the overseas military presence. Unless government intends to renege on promises to retirees, the public debt will expand rapidly. We are not going to enjoy our current low cost of credit when that happens. Every extra percentage point of yield owed will be felt.
As we borrow more, the dollar will weaken considerably, the benefits paid to retirees will not be adequate for a decent standard of living, and the retirees will be forced to cash out of their investments to supplement- not only will the retirement of the baby boomers put unprecedented strain on our tax system and on our ability to borrow, but it will drain plenty of price support out of the equities markets.
This was all predictable 30 years ago and 30 years ago was when we should have begun paring down the defense budgets , but on we went, into multi-trillion dollar wars. Not smart.
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