In a NY Times op-ed, Rob Parenteau and Yves Smith reminded us that the private sector financial balance is a function of the household financial balance and the corporate financial balance. They concluded the following regarding excess corporate saving: So instead of pursuing budget retrenchment, policymakers need to create incentives for corporations to reinvest their […]
What’s your answer? “Thinking about the past few decades… to the best of your knowledge, which ONE of the following U.S. Presidents do you think did the best job of managing the economy?” Bill Clinton Ronald Reagan Barack Obama Lyndon B. Johnson George W. Bush Richard Nixon That’s question #11 of the the Allstate-National Journal […]
by Bruce Webb Back in 2000 Alan Greenspan warned Congress about the potential disappearance of the long bond in the face of continuing surpluses. He probably knew at the time that he was just feeding the appetites of tax-cutters, and not say advocating for using those surpluses for something like Universal Single Payer, but he […]
We’re used to that line by now. Ross Perot—one of the more prominent people who got rich due to government contracts—used it, Carly Fiorina and Meg Whitman are using it (while desperately hoping you don’t pay attention to how they ran Lucent/HP or eBay), and Aaron Sorkin even had Charles Grodin say it in Dave, […]
Debt, Deficits, and Defense…The Sustainable Defense Task Force set in motion by Rep. Barney Frank has comprehensive suggestions. It is more specific than other suggestions I have read. David Ignatius of the Washington Post sees deficits concern as a possible unifying process among right/left thinking. I don’t see it. Bruce Bartlett comments on deficits and […]
Savvy consumer of the St. Louis Today on line edition points us in the direction Pete Peterson might be suggesting from this post: Debtors prisons might have gone the way of medical leeching and boneshaker bikes, but that doesn’t mean consumers in some states can’t end up in the clink if they fall behind on […]
In case you haven’t noticed, I have become slightly less “optimistic” about the prospects of a sustainable U.S. recovery. I used to think that the household deleveraging story was more of a decade-long project, and the economy would cycle throughout. But recent deficit hysteria has me worried; income growth might lapse. What differentiates this recovery […]
by Rebecca Wilder(crossposted with Newsneconomics) This week the Federal Reserve reported the Q3 2009 Flow of Funds accounts. The headline indicators show household net worth improving and private debt burden falling. The private sector – households and firms – is dropping leverage. Update: This chart has been modified slightly – the leverage level data (highlighted […]
Households in the US and the UK are members of the “most levered club”. But put their balance sheets side-by-side, and the outlook for the US economy looks a little brighter than that for the UK. Why? Both are dropping debt burden, but a qualitative analysis suggests that the UK household leverage (probably) should be […]
by Rebecca The Federal Reserve released its quarterly Flow of Funds Accounts, and the message is crystal clear: the private sector is dropping debt burden, while the public sector is growing it. Quarterly private sector debt growth, households + nonfinancial business + finance, has been slowing or negative since the second half of 2007. In […]