> the idea that the government has no intention of reducing the deficit. Close. How about this: reducing the deficit would be extremely painful and therefore

> the idea that the government has no intention of reducing the deficit. Close. How about this: reducing the deficit would be extremely painful and therefore postponed as long as possible, and then undertaken in a half-hearted manner. How much of our current financial stability relies on banks having access to zero percent interest rates and being paid interest on the reserves they hold? How much of the apparent recovery is based on stimulus/deficit spending? I hope the answer is "not much", but I'm afraid the answer is "a lot". Banks are sitting on reserves, not lending. The P/E ratio for the stock market is somewhere up in bubble territory. Unemployment may have bottomed, but it is still at terrible levels. We have states in the U.S. and nations in the Eurozone that are hinting at defaults. I think with continued signs of instability, we'll continue to run high deficits (financed in part by Fed purchases). We'll undertake austerity measure when the living-off-debt chickens start coming home to roost. Not before.