Michael Mandel’s piece in Business Week yesterday ended by posing the following question. Suppose the doomsayers are right, and the housing bubble bursts in 2006. Suppose that the fall in real estate prices is large enough and widespread enough to cause significant economic problems for the US. What should Democrats propose that the US government […]
The American consumer has not yet showed any sign of slowing down, despite higher interest rates and slower house price appreciation. Today’s release of January retail sales by Census reported the following: The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and […]
While Tyler Cowen is playing the Ricardian Equivalence card, he opens with the central concern that an increase in consumption means a reduction in investment: Assume that government spends some money today on consumption. That money could have been spent on a durable bridge, but it wasn’t. Some current people benefit from the consumption and […]
Dr. Thoma excerpts from Paul Krugman’s NY Times Commentary: Debt and Denial. Dr. Krugman writes: “In 2005 spending on home construction as a percentage of G.D.P. reached its highest level in more than 50 years. People who already own houses are treating them like A.T.M.’s, converting home equity into spending money: last year the personal […]
Tyler Cowen cuts through a quarter of a century of free lunch Republican spin in just two sentences: Taxes already were raised when the government spending occurred. In that sense the “tax cuts” never were permanent. This is what I love about conservative economists – they get right to the point. Twenty-five years ago, I’m […]
It seems that we can now move beyond talking about a flat yield curve to talking about a truly inverted yield curve: Yield curve inverts after strong auction NEW YORK (MarketWatch) — The Treasury yield curve turned completely upside down early Friday, pushing the 2-year yield above the yields of both the 10-year and 30-year […]
The New Economist provides links to a piece by Michael Mandel noting his usual argument that the national income account definitions understate savings as well as a reply from Brad Setser and the Michael’s reply to Brad. As you will notice in a moment, I’m a bit biased to what Brad said so let me […]
Credit goes to James Hamilton for what may be the best takedown of the gold bugs over at the National Review I’ve seen yet: What’s behind the ongoing run-up in gold prices? One popular interpretation is that investors fear a resurgence of U.S. inflation. But that story just doesn’t square with the facts … I […]
Menzie Chinn gets the last word on the most recent news regarding employment growth – except for the fact that I’ll do a small summary of one aspect of his post that took a longer view of the revised payroll survey figure – with my own graph of this revised series from October 2000 to […]
In the spirit of Brad DeLong’s course on economics reporting, I noticed this morning that Joel Havemann of the LA Times does a reasonably good job providing some context against which to measure the Bush administration’s budget rhetoric: Bush Budget Plan Strikes Home, Not Deficit WASHINGTON — President Bush today will propose a $2.7-trillion budget […]