U.S. Budget and Economy

From February 1st through the 4th, the Buttonwood's notebook blog of the Economist magazine had some interesting posts on the risks of sovereign debt. They were titled The debt trap: ranking the suspects , More debt rankings , The new gold standard , and Adding in the deficit . The first post addresses the effect of a debt trap, where the bond yield is higher than the economy's nominal growth rate. The second post adds in the effect of the debt-to-GDP ratio. Finally, the last post adds in the effect of the primary surplus/deficit. Also called the primary balance, this is equal to revenues minus spending, excluding interest costs. If the primary balance is positive, it's a primary surplus. If negative, it's a primary deficit. The effect of these four factors (bond yield, GDP growth, debt-to-GDP ratio, and primary balance) are also addressed in a Reuter's column titled Sovereign debt maths show risk of vicious circle . The column mentions all four factors in ...