Frozen Contract Terms

From John Cochrane at The Grumpy Economist, Missing mortgage contract innovation: So why are we here, and given that we are here why does this strange contract seem so resistant to innovation. I think the answer is simple: 15 and 30 year fixed rate mortgages were a...

Inflation and MMT

The growth in the debt from the accumulated deficits would have expected to increase inflation according to most economic models. There are several theories why this has not occurred. The decrease in velocity, the turnover of money, has muted the effects of monetary...

The Seduction of Hidden Costs

In a democracy it is the nature of government to promise benefits without paying for them.  To accomplish this, they hide the costs in cross subsidies, mandates, proxies, regulations, tax codes, debt, and various forms of complexity. They are so successful that they...

It’s the Entitlements, Stupid

from John Cochrane in his excellent blog, The Grumpy Economist, Why Not Taxes? Let us take the estimate that the recent tax cut cost $1.5 trillion over 10 years, i.e. $150 billion per year or 0.75% of GDP.  Compared to the $800 billion current deficit it’s small...

Tax Math Reality

from John Cochrane in his excellent blog, The Grumpy Economist, Why Not Taxes? America in fact already has a more progressive tax system than pretty much any other country. Making it more progressive would increase economic distortions dramatically. A key principle...