Government Bubble Burst – WSJ

Stung by historic losses in recent years, long-term bond investors are showing a diminishing desire to lend to the U.S. government. Or maybe it s just that the government is trying to borrow too damn much. Even in the congressional chamber controlled by Republicans, the leadership debate revolves around how many spending expansions the next speaker will jam into another debt-fueled bill. Interest-rate math hasn t yet intruded into politics even though it has already meted out severe punishment in the markets. Investors are now demanding more compensation in return for financing Washington s historic fiscal recklessness.

via www.wsj.com

But see Prof. Blinder below for his jolly take.

James Freeman.