Yglesias gets confused. Borrowing goes on all the time, it is just DC and the politicos that are no longer credit worthy, they have low multipliers.
Drum cannot understand that inflating away some debt is what central banks do when they have traction. The Central banker in DC has inherited the low multipliers of its major customer and has no traction.
So what happens when DC reduces spending in this situation? Real GDP goes up.
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