After Andrew Samwick noted an interesting query as to the Baker-Krugman logic, Luskin decides he has to hurl insults at Dr. Krugman: Krugman states that the return on stocks from dividends and share repurchases is 3 percent. He states that “profits grow at the same rate as the economy,” and notes that “economic growth … […]

By the time I awake tomorrow, Kash is likely to have posted the employment report for the first month of this year. For reasons noted below, I’m HOPING employment increases a lot this month and every month for the year. Hoping but not forecasting. Greg Mankiw of the CEA is forecasting employment growth of only […]

Andrew Samwick summarized the blog reaction to Krugman’s latest NYTimes oped the same even that the oped ran. Andrew was kind to my musing about the Solow growth model after he offerred his insights, which I do agree with: The critical assumption in the Baker/Krugman example is that the dividend yield doesn’t rise above a […]

Where’s the pressure to change the US’s creaking health care system? I simply do not understand how this country’s leading politicians continue to avoid political pressure on this issue. Take a look at this selection of today’s news stories: Health care is a problem for the middle class: Study: Health costs spur bankruptcy Half of […]

Here’s Bob Somerby, unfortunately only describing (as opposed to either transcribing what was said, or saying it himself on NPR or CNN) what a talking head or expert should say when confronted by the “worthless IOUs” claim: RECOMMENDED ANSWER [to the “worthless IOU/How can the government repay the trust fund” sophistry]: Easy! Almost surely, the […]

Paul Krugman writes in his latest New York Times oped: To get a 6.5 percent rate of return, you need capital gains: if dividends yield 3 percent, stock prices have to rise 3.5 percent per year after inflation. That doesn’t sound too unreasonable if you’re thinking only a few years ahead. But privatizers need that […]

First the CBO tells us that Social Security Trust Fund reserves will continue growing after 2018 and now the GAO writes that today’s fiscal policy is unsustainable. Just as the President leaves town to promote his Social Security plans, these analysts commit unforgivable acts (as in telling the public the truth).

How big will the US’s current account (CA) deficit be in 2005? The best forecasts of the CA deficit for 2005 are in the neighborhood of $750-$800bn. That would be roughly consistent with the pace that the US ran during the end of 2004. But because of an interesting paradox that exists about the 2005 […]

In a piece in the next issue of The Economist, Brad Setser nicely explains the risks of a potential yuan revaluation against the dollar: According to Brad Setser, a former Treasury official now at the University of Oxford, a dearer yuan would have a more significant effect on capital flows. At the moment, foreign capital […]

Via Joshua Marshall provides a link to the GOP’s weekend retreat reading material. There is a lot of misleading nonsense in this document, so it may attract a lot of rebuttal comments from various blogging economists, but there is a set of claims in the very opening summary , which I’d like to focus on. […]