“But history doesn’t wait for anybody to vote on it. That affects everything, including the economy.”
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If the deficits are not monetized then they are added to the debt. While this does not add to the current inflation pressures, at what point and how will this affect our monetary balance? Inflation historically has been a seductive solution to excess debt.
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Firewalls serve to restrain complex and tightly coupled systems; small recessions are preferable to systemic failures. The political wish to avoid recessions by neutering small corrections only paves the way for greater failures.
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The independents increasingly decide elections but are muted in the primaries. We nominate candidates in the primaries that fare poorly in the general election, voting based on who they are not rather than who they are. This dynamic leads to political volatility.
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But these explanations leave me uneasy. Without the pain of excessive government debt is there ever an end to it? It seems doubtful that scarcity has been erased from economic reality. The absence of short-term firewalls has historically led to large reconciliations, and it just seems immoral to spend more that you can pay for. In 50 years gold has risen from $35 to $1517.99 an ounce (1/1/20), does anybody care? The dollar is strong, and the American economy is performing better than any other in the world, even if that only provides a low bar.
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Descriptive powers do not naturally unfold into predictive accuracy. Models by their nature must eliminate variables that can be critical. An economy as large and as dynamic as ours is a wonderful and complicated thing and not cooperative to descriptions and predictions according to simple models.
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Most do not realize that we have not yet paid the bill for the recession and the Obama spending. Obama depended on the Keynesian multiplier to stimulate the economy. It failed because too many other friction costs counteracted it; including higher taxes, increased regulations, and a generally unfriendly business climate in DC. Even without these friction costs, the benefit of the multiplier is limited.
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Presidents get too much credit and blame for an economy as if it turns on a dime the moment they are elected. The right want to credit Trump for the sharp rise since he was elected, but attributes no credit
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from The WSJ, Phil Gramm and Michael Salon, Reagan Cut Taxes, Revenue Boomed: As inflation plummeted from the CBO’s projected average annual rate of 8.3% for 1982-86 to an average of 3.8%, revenue compared with projections tumbled $22 billion in 1982
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Kevin Williamson is one of the best economics writers around, especially for a non economist. His style follows in the tradition of Henry Hazlitt and his classic Economics In One Lesson, bringing economic theory into common experiences. This is from latest
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Kevin Williamson is one of the best economics writers around, especially for a non economist. His style follows in the tradition of Henry Hazlitt and his classic Economics In One Lesson, bringing economic theory into common experiences. This is from the
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from Steve Forbes, The Fed Needs A New Leader–And New Policies, Too: Yellen openly and unapologetically made clear that our central bank still hews to the discredited theory that prosperity causes inflation. “The economy is operating relatively close to full
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Kevin Williamson’s Welcome to the Paradise of the Real was written over two years ago and I still refer it to readers.Sneaky Inflation is equal to that piece in bringing sound economic thought to bear on current issues with an engaging style. Both
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From The Reasons Behind the Obama Non-Recovery by Robert Barro in The Wall Street Journal The main U.S. policy used to counter the Great Recession was increased government transfer payments. Federal social benefits to persons as a ratio to GDP
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Henry Hazlitt wrote Economics in One Lesson in 1946 and it is still a classic. Hazlitt was a reporter, not a credentialed economist and he brought the dry concepts of economics to the lay reader. Kevin Williamson, a journalist as
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from Stubborn Things, The Symptoms Are Not The Disease excerpts: The difference today is about 2% official inflation (blue) versus about 9% (gray) based on the pre-1982 calculation. Inflation isn’t absent, it’s just been officially “recalculated” and adjusted away. Proof of the adage,
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From Robert Samuelson in The Washington Post, Interest rates and the Fed’s great ‘slack’ debate: Is it time to consider raising rates to preempt higher inflation? The answer depends heavily on the economy’s slack: its capacity to increase production without
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One of the early signs of the pending economic collapse in 2007 and 2008 was a sharp drop in truck rental rates. As a result of the severe economic downturn the domestic truck fleet shrunk about 9%. New trucking regulations
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More from Roy Fickling in response to a debate that centers on promoting economic growth verses a more fair and even distribution of wealth. For a bit about Roy’s experience see The Great Debate Part I Let’s take socialism to
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We are living in interesting times. While the professional economists are trying to figure out what happened we have all become economists of sorts just to try and understand the events that greet us every day. With huge deficits many
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