According to this Bloomberg story from last Friday, a just-completed Barclays survey shows that 40% of Japanese institutional investors now think there's an increased possibility that the United States will default on its debt.

I don't think there's any chance the United States will default on its debt, but the fact that such a large percentage of the buyers of our debt from our second largest  lender thinks so is not a good thing, especially as we're about to borrow much, much more.

As the article points out, this is already increasing our cost of borrowing as foreign demand for U.S. debt falls.

My guess is that this this is one of the reasons we keep hearing the White House talk about a long-term get-our-budget-in-order strategy.

Here's the full story.

I'm haunted these days by a single budget-related question: what if, as Bill Clinton promised as he left and George W. Bush promised as he entered office, the national debt had actually been paid off by the end of this decade, that is, by just about now?

The bailouts we're implementing and talking about today would have been of far less concern than they are.  Indeed, the $2 trillion or so in additional debt the federal government is going to incur this year would likely have been welcomed by the bond market.  The additional interest payments that we're going to have to pay for decades would have been on top of an annual interest bill that by now would have been less than $100 billion a year and, therefore, not much of a concern.

Does anyone else think that not paying down the debt was a huge lost opportunity that may not happen again in our lifetime? 

Today's required reading is actually from last Sunday, but I've been traveling and catching up this week and am thus a bit late to comment on it.  It comes from Andrew Bacevich, in last Sunday's Washington Post.  The more I hear him speak and read his books and columns, the more I admire his thinking on the challenges we face as a nation and the pitfalls in the way we have confronted them to date. 

The title of the column says it all, "He Told Us to Go Shopping. Now the Bill Is Due."  Well, almost all.  Here's a key excerpt:

Here's another report from the CBS News with Katie Couric about government borrowing. Again, there's nothing here that wonks and policymakers will find new. But they're not the target audience: up-to-now-uninterested-viewers are the ones who mostly watch the evening news. This is also the group that has to become interested if the situation is going to change.

I'm going to check with CBS on Monday to find out how long this series is going to continue.

The national debt is not usually news.

Except when it's not increased by the time the government's existing debt ceiling is reached and the Treasury has to do some interesting things to manage cash flow, federal borrowing is seldom widely reported. When it is, it's usually only of interest to Wall Street and mentioned mostly by financial outlets like Bloomberg, Marketplace, CNBC, etc.

This has been especially the case in recent years as the White House has tried to dampen public and media interest in anything having to do with the budget, fiscal policy, and federal finances. By not talking about it, the administration has tried to convince everyone that it's not an issue.

Former U.S. Chamber of Commerce Chief Economist Richard Rahn has a "don't worry be happy" piece in today's Washington Times that, at least when it comes to the federal budget and U.S. fiscal policy, is one of the best examples of selective memory I've seen in a long time.

Rahn says that, because the budget deficit fell slightly from 2006 to 2007, the Bush tax cuts have been a huge success. Here's what he's conveniently not saying: