House Speaker John Boehner (R-OH) has been telling everyone that “we’re broke.” Well, we’re not.
“The U.S. government is not broke,” said Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York. “There’s no evidence that the market is treating the U.S. government like it’s broke.”
The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so.
That doesn’t mean we still don’t have financial problems that the Republicans and the people who voted for massive tax cuts and two unpaid wars got us into, but we’re not destitute. It is — surprise — just a political play that Mr. Boehner is using to justify cutting funding from programs he doesn’t like.
Chances are that Mr. Boehner knew all of that before he made his statement, but hey, so be it. And it’s probably why he and the GOP haven’t done anything about fixing the economy and creating jobs since they’ve been in charge but instead spent their time reading aloud and demonizing Planned Parenthood.