http://www.stepwiseadvisors.com/ny-times-chimes-in-on-infrastructure-misses-the-point financial guidance that makes a difference Fri, 27 Jan 2012 14:09:04 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.stepwiseadvisors.com/ny-times-chimes-in-on-infrastructure-misses-the-point/comment-page-1#comment-110 jgmumm Fri, 19 Feb 2010 15:56:48 +0000 http://www.stepwiseadvisors.com/?p=895#comment-110 One thing I didn't touch on yesterday in this post was the relationship between our national deficit and the issue of raising money to address infrastructure needs. The current deficit is now 12x GDP without including unfunded mandates of Social Security and Medicare. For the first time ever, there is discussion among economists of the plausibility of the US defaulting on its debt obligations. Even if default is not plausible, the current debt capacity of the US is such that increasing interest rates could be in our future for decades to come and that would have a profound effect on all interest rates worldwide, even for municipal bonds that will be the main vehicle for financing infrastructure replacements. That means that financing our infrastructure needs in the future could well be more expensive than anyone is talking about right now. One thing I didn’t touch on yesterday in this post was the relationship between our national deficit and the issue of raising money to address infrastructure needs. The current deficit is now 12x GDP without including unfunded mandates of Social Security and Medicare. For the first time ever, there is discussion among economists of the plausibility of the US defaulting on its debt obligations. Even if default is not plausible, the current debt capacity of the US is such that increasing interest rates could be in our future for decades to come and that would have a profound effect on all interest rates worldwide, even for municipal bonds that will be the main vehicle for financing infrastructure replacements. That means that financing our infrastructure needs in the future could well be more expensive than anyone is talking about right now.

]]>