"So what? If rates raise then the deficit will increase $100B.... A few trillion dollars here, a few trillion there, so what?"
The above is two direct quotes combined. He made the statement after he was asked what happens after rates rise. This is a great example of economics today. So what if we owe a few trillion dollars more in the future? So what if the price of gold goes up. So what?
This is indicative of an economist. In fact I had the same conversation with an economic professor 2 years ago. I was discussing monetry policy as dictated by her, and by Keynes, and every economic professor who taught at the University. I said gold would go up if we issued debt at no interest. She said, "So what?" I said that gold directly trading in a 1:1 ratio with oil, because oil trades with other resources inverse the dollar. She said, "So what?" I said that high oil prices decrease GDP and that it would increase the price fo food, further decreasing GDP. She sat stone cold for one minute and I am not exagerating. She sat there for one minute. Finally she said she didn't know how to respond.
So we know that these economists, these Drs. of science, haven't thought it all the way through. The are not away of the consequences. This is because there has never been a time when American could not repay its debt. In 1970 it got close, but because Nixon closed the gold window, the debt could be repaid in fiat.
Yet now it is a different time. One where GDP is edging closer to 0%. This will be a turning point, and no amount of fiat can save it.