Milton Friedman was on the Charlie Rose show a few weeks ago. For the younger readers, he was a forbear of Alan Greenspan's. And when he left, all the lamentations you are hearing now about Greenspan you could hear back then about Milton. Gee, those Wall Street types are twittering hand-wringers.
And what did Milton say? That people will still send their cash to the US because there is no other risk free place to put it. So the deficit and spending the fleeting 'value' of your house won't matter! Those foreigners will be happy to lend us the money. Don't you feel better now?
Econo-Girl remains a bit dubious. How is it that living in debt as a nation doesn't matter? Milton Friedman said also that people are wealthier and better off now than they were thirty years ago because of deregulation. So there is nothing to worry about. Everything is fine.
On a side note, Econo-Girl's new novel is moving along quite nicely.