Someone asked me to comment on the recent reports that suggest the already not-fast-enough growth rate of the economy may be slowing.
And I got four numbers for you: 1-9-3-7 as in don’t make the mistake of going for fiscal and monetary contraction too soon. While there’s no reason not to plot the path toward fiscal sustainability today, the target right now must be the jobs deficit, not the budget deficit.
Finally, I’ve got one other number for you: 2.96–yesterday’s closing yield on the 10-year Treasury bond. That is a very low number. It means a) budget deficits are not leading to higher interest rates, b) investors are worried about growth, not deficits, c) the cost of borrowing is telling us budget math supports the jobs target noted above (DeLong has the details).
The indicators are speaking to us, they’re singing in one melodious voice, though in a minor key: don’t just stand there fretting, screwing around with the debt ceiling, threatening aggressive spending cuts and fiscal austerity…do something, do something!