Deficits Be Hanged (Temporarily) - STIMULATE NOW!

An Arrow Through the Throat of the Deficit Hawks (Who will eat our livers if we don't get them first.)
Bloomberg.com is a hard core financial news site. No wishy-washy ideology-driven spins on the money news. Here are some excerpts from today's issue:

Are the "Bond Vigilantes" Going to Punish Obama?

Instead of punishing the Obama administration for running up a budget deficit ..., bond investors are pouring money into fixed-income assets as inflation slows and equity markets stumble. That’s a turnaround from 16 years ago, when Bill Clinton was forced to abandon stimulus plans after his advisers said the bond market would punish him with higher borrowing costs if it sensed swelling deficits.

“The deficit concerns are on the back burner,” said Andy Richman, who oversees $10 billion as a strategist in Palm Beach, Florida for SunTrust Bank’s private wealth management division. “The bigger concerns are on the deflationary mode and seeing growth slowing in the second half of the year.”

Obama has the bond market on his side as he heads into midterm congressional elections saddled with a 44 percent approval rating as measured by the latest Gallup poll.

Servicing Our Debt Too Onerous?

Through the first 10 months of fiscal 2010, $375.2 billion of taxpayer money was spent on interest.... As a percent of gross domestic product, it was 3.2 percent in 2009, down from 4.1 percent in 2001, the last time the budget showed a surplus.

Bond vigilantes, the debt markets’ self-commissioned advocates of fiscal discipline, have been placated as the rate of inflation falls to a four-decade low of 0.9 percent.

Policy makers should focus on promoting economic growth and job creation rather than deficit reduction, a majority of respondents said in a survey by the National Association for Business Economics released today.

Seven out of every 10 survey respondents said promoting economic growth should be the policy priority at the federal level, while 29 percent said cutting the deficit should take precedence.
(THAT'S 70/30, math fans. IN FAVOR OF MORE STIMULUS!!)

It's Worked So Far... WHY Stop it Now??

Obama’s stimulus package may have created or saved as many as 3.3 million jobs last quarter and lowered the unemployment rate by as much as 1.8 percentage points, the CBO said last week. The $814 billion program, known as the American Recovery and Reinvestment Act, probably added between 1.7 percent and 4.5 percent to gross domestic product, the nonpartisan agency said.

“Those problems about rising debt and the deficit will be addressed, but for now, the bond market is concerned about economic growth.” said Anthony Valeri, a San Diego, California-based market strategist at LPL Financial Corp., which oversees about $277 billion.

AREN'T WE ALL! Get the economy cooking again - get employment back up to full tilt - and we'll pay down those deficits pronto.

Read the full Bloomberg article here.