Krugman thinks it won't increase the current net borrowing of the U.S. On the other hand, he also admits that "If investors lose faith in that …" with his "that", he is referring to "the [US] government’s ability to raise taxes. "
Should global investors have faith in the ability of US government to raise taxes? Are you kidding me? Neither current presidential candidate dares to say that they will increase taxes and any person who learned a little about American politics hasn't heard the famous phrase "Read my lips: no new taxes"?
Magnus: China Must Reform or Bust - China's debt markets are looking more and more like the West, circa 2007. And it's not clear the government can intervene as successfully.
1 hour ago