Mr. Krugman said yesterday that the economy is “awash in excess savings with nowhere to go”. If we are awash in excess savings, why do we borrow from foreigners? Let’s look at this equation to determine net borrowing from foreigners… Current Account deficit (net borrowing from abroad) is… (M – X) = (G – T) […]

In part #1 of this series on international flows, Norway’s trade deficit of the 1960’s was associated with foreign investment coming into their country. So the net trade deficit of the Current Account was matched by the net foreign investment surplus of the Capital and Financial Account. There is a principle in international income accounting… […]

by Linda Beale Deficit Disorder Symptoms–via Naked Capitalism/New Economic Perspectives Yves Smith over at Naked Capitalism has an insightful re-post today on the way the right in particular–and most in the media and public–talk about deficits and misunderstand the relative importance of failures to invest in physical and capital infrastructure (roads, education…) versus the relative […]

Is the US trade deficit a problem? Are we somehow incapable of competing in the international market? Is there anything good about being such a debtor nation to China? Is the US really losing jobs to other countries? These issues are heated. People are passionate about their views. Yet, it seems most people don’t understand […]

James Hamilton at econbrowser has a fascinating post titled, “Why isn’t inflation lower?” He presents a paper titled, Is The Phillips Curve Alive and Well After All? Inflation Expectations and the Missing Disinflation, written by Olivier Coibion at UT Austin and NBER and Yuriy Gorodnichenko at UC Berkeley and NBER. It would not be easy […]

Via the Washington Post: Here’s David Cay Johnston, interviewed by Joshua Holland (link from Joseph Delaney), in response to a question about “why we have a very low tax burden overall, relative to other wealthy countries, but a lot of Americans feel that they’re being taxed to death?”: Well, one of the reasons some Americans […]

Here is a video of an interview done by International Business Times UK. The video addresses the issue of “Mis-selling of derivatives” before the crisis. The banks are stalling on judgements so that the time limit passes and people cannot bring claims against them. They are also doing some other unethical things. Yet, the government […]

But weak job growth in the face of big corporate profits. As I explained in the video of a previous post, the supply of money to capital income has increased, and they are enjoying the cost savings from low interest rates. They give many thanks to the Fed’s monetary policy. Meanwhile, lower interest rates are […]

This little video puts into 1 minute and 43 seconds, the simple challenges to Abenomics in Japan. Getting money from the corporations into the pockets of the people, namely labor, namely the consumers. Aging population on fixed income. They like deflation. Small percentage of children in population. Children are actually outnumbered by pets.  

Brad DeLong reviews Alan Greenspan’s new book: Alan Greenspan: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting: The true size of the American subprime problem was hidden for years by the defective bookkeeping of the GSEs…. Not until the summer of 2007 did the full magnitude of the subprime problem […]