Jan 112013
 

My friend James McCusker, tongue planted firmly in cheek, suggests that rather than just one trillion-dollar platinum coin as a solution to our debt-deficit-fiscal mess, we mint one worth $50,000 for each of us. That’s roughly 315 million shiny tokens. Poof! Our debt problem goes away. How do you plan [continue reading . . . ]






Jan 102013
 

Don’t miss today’s New York Times obit of the 1986 Nobel laureate and George Mason University professor James M. Buchanan. Like everyone else, Buchanan taught, politicians tend to act in their own self-interest Courting voters at election time, for example, legislators will approve tax cuts and spending increases for projects [continue reading . . . ]






Dec 122012
 
Printing more will do what, exactly?

So we have just started Year 5 of N-ZIRP, the Fed’s near-zero-interest-rate policy, and it is working so well that the Fed will have to keep printing money. What’s wrong with this picture? In fact, despite a massive expansion of the Fed’s balance sheet, and some of the lowest interest [continue reading . . . ]






Oct 302012
 
Fix the fisc? Not a chance

In the decade through Fiscal 2008, Uncle Sam spent at the rate of about 19.4% of U.S. gross domestic product (GDP), and took money in at the rate of about 18.3% of GDP, resulting in annual deficits of about 1.1% of GDP. In Fiscal 1999, at the start of that [continue reading . . . ]






Sep 172012
 
QE and financial repression

Say what you please about Ben Bernanke’s unconventional monetary policies (quantitative easing, QE for short, and Operation Twist), they’ve been good for the stock market. The first chart shows that stock prices have roughly doubled, give or take a few percentage points, since Dr. Ben launched the first round of [continue reading . . . ]






Sep 042012
 

Fix Medicare, primarily by restricting end-of-life care, as insurance companies do now. Fix Social Security by minor changes to (1) the payroll tax, (2) the benefit formula for high-income beneficiaries and (3) the retirement age. Fix the hopeless hairball that is the U.S. tax code primarily by (1) broadening the [continue reading . . . ]






Jun 052012
 

Martin Wolf, much-honored chief economics commentator of the Financial Times, has been my beacon during the financial crisis. So it is especially discouraging to read his June 6, 2012, column, headlined “Panic has become all too rational”. Wolf argues that the advanced economies are caught in a “contained depression,” that [continue reading . . . ]






Sep 112011
 
Ponzi scheme?

Is Social Security a Ponzi scheme, as Texas Gov. and GOP presidential candidate Rick Perry labeled it during the GOP candidates’ debate Sept. 7? The answer is “No.” Charles Ponzi gave money collected from early suckers attracted by phony promises of high returns to new suckers after taking a cut. [continue reading . . . ]






Jul 032011
 

The bad news is that the United States – indeed, much of the developed world – is in the midst of a “contained depression.” The private sector continues to de-leverage. Unemployment remains high. Pay for most is static or declining. Deflation remains a bigger threat than inflation. Depressions eventually end, [continue reading . . . ]






Jun 222011
 

Oregon would have to increase taxes on each household by more than $2,000 each year for several years to fully fund the pension obligations of its public employees (those working for states, counties, cities, school districts, etc). By this measure, only in New Jersey and New York are the burdens [continue reading . . . ]






Jun 012011
 

On KUOW’s Weekday talk program today, Steve Scher, the host, asked if I had any ideas about the “Lesser Depression” I was talking about. I think I have a decent radio voice, but I’m slow on my feet, not nimble. I stalled for time, then mumbled something about Paul Ryan’s [continue reading . . . ]