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 […]
I’d like to push back on Paul Krugman a bit, on this bit in particular: Yes, the government must pay its bills in the long run You hear this from him a lot. And I want to ask him: Paul, are you letting yourself be sucked into the very syndrome that you so bemoan and […]
by Linda Beale Fixing Sequestration (for the rich only) Once again, Congress has demonstrated that it notices mostly what affects rich people and can’t quite identify with ordinary Americans. And that it will not pass either spending laws or tax laws (which include a wealth of spending laws through the tax expenditure mechanism) that equitably […]
Yves Smith will be on Harry Shearer’s Le Show today (Sunday), originating at 1 pm ET live on many public radio stations, and aired on many others throughout the day. Good streams are available all day, each hour, at publicradiofan.com. The topic is the Independent Foreclosure Review fiasco. (check local listings here…)
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 […]
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 […]
As if there were not already abundant proof of the failure of austerity in the eurozone, the BBC reported yesterday that both Spain and France have hit new unemployment milestones. In Spain, unemployment has jumped from February’s 26.3% to a first-quarter rate of 27.2% (implying an even higher figure for March). In March 2012, it […]
The latest estimates of the cost of bailing out Fannie Mae are dramatically lower than previously reported estimates. Because of accounting rules, Fannie and Freddie would be forced to recognize the increase in value as profit — and turn it over to taxpayers. Fannie has suggested that might occur this spring — and said it […]
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 […]