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When will markets react to rising debt? That’s the wrong question
Is the federal government’s history of enormous deficits proof that it can keep up the borrowing? Some people think so, and legislators sure act that way. Federal debt held by the public now equals the size of the annual economy — and is growing. Yet investors continue buying Treasury securities. No government’s bond sale has really failed, no one has suddenly refused to finance Washington’s spending, and no unmistakable moment has forced Congress to change course. [...]