Wrong interpretation

Why do Furman and Summers think we shouldn’t worry about the federal government deficit? Their main reason is that the interest rate the federal government pays on the debt is so low. They point out that the current real interest rate on ten-year government bonds is 0.8 percent. (The real interest rate is the stated interest rate earned on bonds minus the inflation rate.) As a result, even though the federal debt is a much larger percent of GDP than it was in recent decades, the federal government “pays around the same proportion of GDP in interest on its debt, adjusted for inflation, as it has on average since World War II.”  

The correct interpretation is that we should worry about the deficit because we can only support a ten year rate slightly above 'inflation'. (Inflation in this context is the implicit deflator). We do not have the steady tax stream, more interest cost volatility and we shut down.

Dave Henderson says, "What about the future?" The future already happened, in 2009. We have been in 'What about the present?" since then, where present is getting the interest payments made.

But we test the theory, Trump will take them up on the deal this March, and we will see if the ten year yields jumps and housing dumps. A sudden jump in the ten year yield and California does the slow swing.