Hard to Argue with Mr. Hamilton

James D. Hamilton, writing at Econbrowser.com, Nov. 25:

$1 trillion is approximately the total personal income tax receipts collected by the U.S. federal government in 2006. So, to calculate what another trillion in deficits means for me personally, I take the amount I paid in federal income taxes that year and double it; $10 trillion in new debt will require 10 years at that higher rate to pay off. It's going to be a real problem for any politician who tries to service the growing debt burden by raising taxes. That's why I see troubles ahead for managing the federal cash flow.

. . . at the moment, we're observing an amazing willingness of investors and foreign central banks to lend to the U.S. Treasury. . . . [but] what will the situation be another two years down the road, when the government will need to go back to bond markets to roll over the . . . several trillion added to the federal debt between now and then? . . . Is it possible that some time within the next five years, the U.S. Treasury will run an auction in which there are not enough bids to roll over the debt? My answer is yes.