(See the two notes at the bottom.) Back in January 2005, when President Bush was ramping up his attack on Social Security, Peter Wehner, a White House political strategist, wrote in a memorandum to conservative groups: “We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable … Read more
Summary: Yesterday we examined the condition of the US economy. Today we look at a major driver of our prosperity, and what might be its long-term effects. Stand by for a boom! . Contents How we got here What do we have to show from 5 years of massive stimulus? Why continue the stimulus? Putting the stimulus … Read more
The Micronesian island of Nauru is prominent in Australian consciousness. As part of the Pacific Solution, Australia pays Nauru to “process” refugees pending determination of their immigration status. But Australia’s economic future may also parallel that of Nauru. In the 1960s and 1970s, Nauru boasted the highest per capita income in the world. Its wealth was … Read more
It seems there almost nothing bad about olive oil. It is delicious, of course, and if you are a connoisseur, you can get as much pleasure from a fine bottle of olive oil as from a premium Brunello di Montalcino. A high content of monosaturated fats makes olive oil among the most heart-healthy of all … Read more
Textbook discussions of fiscal policy describe it as a stabilizing force for the private economy. Fiscal policy can stabilize aggregate demand by adding to demand during recessions and subtracting from demand during business expansions. However, actual fiscal policy of the United States has deviated from this textbook description, especially in the last decade. In the … Read more
There are fundamental errors in the conventional analysis of, and approaches to, current macroeconomic problems, the results of which are disappointing or ineffectual outcomes to policy interventions, along with a dangerous loss in public confidence for the US government’s capabilities to intercede effectively. In contrast to economic projections that predict a slow and precarious recovery, … Read more
Risky assets generally started the new year on a strong note, led by handsome gains for equities in the US and the developed world. The leading source of red ink last month: government bonds in developed markets. Overall, the unmanaged market-value weighted Global Market Index (GMI) gained 2.5% in January, building on a strong run … Read more
Aiee! CNS News found this tidbit (hat tip furzy mouse), contained in IRS final regulations published on January 31. Now admittedly these are examples for the purposes of illustrating how to make various calculations under the new regulations, but the assumptions are pretty clear. The cheapest type of plan in ObamaCare is a bronze plan, and bronze … Read more
Wednesday’s data release from the Bureau of Economic Analysis surprised us with a reported decrease of 0.1 percent in GDP for Q4 2012. Now, just two days later, a report from the Bureau of Labor Statistics shows robust job growth throughout the last quarter and continuing into January. The two offer sharply contrasting indications of … Read more
The often interesting Matthew Yglesias wonders “Are Banks Too Big To Prosecute?” See here. Here’s his thesis. Sure, Megabanks committed tons of fraud. But we cannot prosecute banks for the fraud because that would bring them down. And the bigger they are, the more fraud they perpetrated, but the bigger the insolvency hole if we … Read more