Relevant and even prescient commentary on news, politics and the economy.

Too big to fail

Reader rjs points us to: Everyone’s Missing the Bigger Picture in the Reinhart-Rogoff Debate – But whether you believe that the errors in the RR study are fatal or minor, there is a bigger picture that everyone is ignoring. Initially, RR never pushed an austerity-only prescription. As they wrote yesterday: The only way to break […]

Tax increases

Joseph Rosenberg of Tax Policy Center notes that the chained cpi changes taxes for ppeople as well: Obama Budget Plan Results In ‘Back Door’ Tax Increase For Middle-Class Households: Analysis: For those looking to put the woes of Tax Day behind them, we have some bad news: It’s probably only going to get worse. President […]

Michael Ash and Bob Pollin

Robert Walmann and Kenneth Thomas have traded e=mails with Michael Ash. Michael Ash and Bob Pollin, two economists at PERI, respond to Carmen Reinhart and Kenneth Rogoff in the New York Times: THE debate over government debt and its relationship to economic growth is at the forefront of policy debates across the industrialized world. The […]

Yowza. Now Even AEI is Dissing Austerity.

Fiscal austerity–or deficit cutting–is the subject of much current debate. As Europe proves, severe austerity can slow growth or lead to recession. Despite periodic slowdowns, the US economy is on a sustainable fiscal path. The deficit is projected to drop below 2.5 percent of GDP by 2017, below its 30-year average, helped partially by the […]

Currency is Equity, Equity is Currency

This is utterly brilliant: Twitter / izakaminska: Why equity is a type of privately issued currency Steve Randy Waldman has been here before, with the idea that currency issued by government (ultimately through deficit spending) is “equity” in government, or in America. But this reverses it beautifully, with the notion that private equity issuance is […]

Do Savers “Take Resources out of Society”?

Revisiting a previous post, “Saving” ≠ “Saving Resources”*, wherein I question Scott Sumner’s notion that people who spend and consume more (save less) take resources “out of society.” Try this: John works for Debbie, and Debbie works for John. They each start out with $100 in dollar bills, $200 total. They pay each other in […]

Debt and Growth III

I’m going to try to make this post brief and comprehensible.  It contains no information not in an earlier post but I delete a whole lot of distracting data. The question is does the Reinhart Rogoff (hence R-R) data set on public debt and real GDP in 20 rich countries post WWII contain evidence that a […]

All Currency is “Fiat” Currency

Or to be more precise, all currency is consensus currency. Units of exchange (dollar bills, great big rocks at the bottom of the ocean) can have value merely because everyone in a community agrees that they have value. That value need not be declared, defined, or enforced by by some “fiat” authority with powers of (ultimately […]