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Government “Stimulus” Keeps Having a Diminishing Effect
Government “Stimulus” Keeps Having a Diminishing Effect The United States economy recovered at a 6.5 percent annualized rate in the second quarter of 2021, and gross domestic product (GDP) is now above the prepandemic level. This should be viewed as good news until we put it in the context of the largest fiscal and monetary stimulus in […]
Monetary Pumping and Resources
MONETARY PUMPING AND IDLE RESOURCES As a result of the recent strong stimulatory policies employed by the US government and the Fed, most commentators are of the view that the risk of a deepening slump in the US economy on account of the COVID-19 pandemic has now receded. Some other commentators are not so certain […]
New Infrastructure Will Not Come Good, Fast, And Cheap
New Infrastructure Will Not Come Good, Fast, And Cheap Anyone naive enough to think America is about to receive a big gift of newfangled “fixed installations” needed in order to function should look long and hard at what is really being proposed. The “underlying structure” a country and the economy rely upon includes things such […]
There’s a Serious Flaw to the Team Powell-Yellen Inflation Scheme
There’s a Serious Flaw to the Team Powell-Yellen Inflation Scheme If you’re a wage earner, retiree, or a lowly saver, your wealth is in imminent danger. A lifetime of schlepping and saving could be rapidly vaporized over the next several years. In fact, the forces towards this end have already been set in motion. Indeed, […]
Do We Really Think a Band-Aid Will Heal a Tumor?
Do We Really Think a Band-Aid Will Heal a Tumor? Borrowing a quarter of the nation’s entire economic output every year to prop up an ineffective, corrupt status quo is putting a Band-Aid over a tumor. If we misdiagnose the disease, our treatment won’t work. We’re all familiar with medical misdiagnoses, which lead to procedures and […]
Stagflation Subterfuge: The Real Disaster Hidden By The Pandemic
Stagflation Subterfuge: The Real Disaster Hidden By The Pandemic In recent economic news, headlines are being dominated by concerns over rising bond yields. Increased bond yields are a sign of a possible spike in inflation and, logically, they call for the Federal Reserve to raise interest rates in order to prevent that inflation. Higher bond yields […]
Rabobank: The Everything Bubble Has Become More Everything And More Bubble
Rabobank: The Everything Bubble Has Become More Everything And More Bubble Oh-No-Bi-Wan Kenobi For those who haven’t seen it –and I accept there are now probably many readers who haven’t– there is a classic scene in the first Star Wars film (Episode IV) in which Jedi Master Obi-Wan Kenobi tells his villainous duelling opponent, his […]
The Next Wave Of Spending Will Not Bring Prosperity
The Next Wave Of Spending Will Not Bring Prosperity We Are Starting A New Series Of Mistakes The surprisingly bad job numbers recently released show America lost 140,000 jobs in December. A big part of the problem is that this is only one indicator of the carnage taking place in our economy. As small businesses […]
State of the American Debt-Slaves, Q3 2020: The Stimulus & Forbearance Phenomenon
State of the American Debt-Slaves, Q3 2020: The Stimulus & Forbearance Phenomenon Auto loans jump after historic price spikes. Credit cards still in stimulus wonderland. Student-loan borrowers count on debt forgiveness, mmmkay. Consumers have undertaken an astounding project instead of consuming: Paying down their credit cards. In September, outstanding balances of credit cards and other […]
Reaching the End of Early Stimulus – What’s Ahead?
Reaching the End of Early Stimulus – What’s Ahead? Many people thought that COVID-19 would be gone with a short shutdown. They also thought that the world’s economic problems could be cured with a six month “dose” of stimulus. It is increasingly clear that neither of these assumptions is correct. Despite the claims of epidemiologists, our […]
Keynesian Ideas Can Only Make Things Worse
KEYNESIAN IDEAS CAN ONLY MAKE THINGS WORSE In the New York Times on September 8, 2020, Paul Krugman suggested that “The CARES Act, enacted in March, gave the unemployed an extra $600 a week in benefits. This supplement played a crucial role in limiting extreme hardship; poverty may even have gone down”. For Krugman and […]
How to Tackle the Depression Head On
How to Tackle the Depression Head On “I want to see people get money.” – Donald J. Trump, U.S. President, September 17, 2020 “Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.” – Steven Mnuchin, U.S. Secretary of the Treasury, September 14, 2020 Money for the People The real […]
What’s to Be Done Now with All These Zombie Companies?
What’s to Be Done Now with All These Zombie Companies? Saving the Zombies in Europe. Europe’s zombie firms are multiplying like never before. In Germany, one of the few European economies that has weathered the virus crisis reasonably well, an estimated 550,000 firms — roughly one-sixth of the total — could already be classified as […]
Massive Lines Form Outside Virginia Food Bank As Demand Hits One Million Meals Per Month
Massive Lines Form Outside Virginia Food Bank As Demand Hits One Million Meals Per Month The economic recovery has stalled, and in some cases, reversed. The $600 unemployment benefits that Americans received following the virus pandemic that crashed the economy in March-April expired on July 31, which means a fiscal cliff has been underway for 44 days (as of […]
Book Review: The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy
BOOK REVIEW: THE DEFICIT MYTH: MODERN MONETARY THEORY AND THE BIRTH OF THE PEOPLE’S ECONOMY In January, the Congressional Budget Office (CBO) released its Budget and Economic outlook for 2020 to 2030. It is horrific reading. Federal budget deficits are projected to rise from $1.0 trillion this year to $1.3 trillion over the next 10 […]
