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Tag Archives: deficit spending

crowdingoutStock markets slid slightly lower on Wednesday, undoing early gains as investors worried that rising interest rates on government bonds and home mortgages could impair the broader economy.

Investors shied away from Treasury debt, pushing interest rates higher, amid more worries that the government’s fund-raising needs would overwhelm demand in the bond markets.

Overwhelm demand? Yeah, I think they just mean there will be a shortage of saved money and interest rates will continue moving up. The bad part comes when investors start considering funding a new project, see that it is too expensive and walk away from the project–the classic monetarist critique of Keynesian economic policy.

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