Home » Posts tagged 'noah smith'

Tag Archives: noah smith

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

Don’t Be So Sure Hyperinflation Can’t Hit the U.S.

Don’t Be So Sure Hyperinflation Can’t Hit the U.S.

Some progressives back piling on even more debt to pay for social programs. That could be risky.

Marking time.  Photographer: Ramin Talaie/Getty Images North America

Discussions of big government spending programs often revolve around the question of how to pay for them. For example, Representative Alexandria Ocasio-Cortez touted her proposal for a 70 percent tax rate on income above $10 million by saying it would help pay for the Green New Deal, a broad package of environmental and economic initiatives.

Implicit in this concern is the idea is that government debt shouldn’t get too big. This is a common belief — polls regularly find that Americans are worried about the national debt. The national debt clock in Manhattan is a famous symbol of this anxiety. The idea is also formalized in mainstream economic models, which tend to assume that in the long run the government has to balance its books. Writing at Brookings Institution, David Wessel expresses this conventional wisdom when he declares that “federal debt cannot grow faster than the economy forever.”

But what if this is a fallacy? What if the government doesn’t have to pay back what it borrows, now or ever? This is the provocative thesis of an unorthodox economic theory that is rapidly gaining credence on the political left called modern monetary theory, or MMT. The concept isn’t new — economist Abba Lerner endorsed something similar in the 1940s, under the name of “functional finance.” But the theory has enjoyed a popular resurgence since it was embraced by some progressives, who want to enact a federal job guarantee and other ambitious economic plans paid for by government borrowing.

…click on the above link to read the rest of the article…

Soothing Noah Smith’s Fears About a Post-Growth World

SOOTHING NOAH SMITH’S FEARS ABOUT A POST-GROWTH WORLD

Last week Foreign Policy published an article I wrote titled “Why growth can’t be green.”  It stirred a lively online discussion – and of course attracted dissenters.  Among them was one Noah Smith, who penned a critical op-ed in Bloomberg.  You can read it here.

I wrote to Noah and asked whether he would let me respond on the same platform, where he contributes a regular column.  To my delight, he agreed.  So I pitched to his editor, copying Noah.  But I received no response.  Perhaps he’s less interested in the debate than he initially let on.  Poor form, by my lights – but oh well.  Here are some of the points I would have made.

1. It’s about resource use, not energy

The main problem with Noah’s piece is that the whole thing is based on either awkward confusion or intentional sleight of hand.

My argument in FP was that it is impossible to achieve absolute decoupling of resource use from GDP on a global scale, even with rapid efficiency gains and aggressive taxes on resource extraction.  This is the conclusion reached by literally every existing study that has been conducted on the matter (you can follow links to the original research here).  The reason is simple: the rate of decoupling is outstripped by the normal rate of GDP growth, even in high-efficiency scenarios.  To make matters worse, there are physical limits to resource efficiency, and as we approach them the rate of improvement slows down, giving yet more force to the scale effect of GDP growth.

In an era in which we are already dramatically overshooting the planetary boundary on material footprint, this means that aggregate global economic growth cannot continue if we want to avoid chewing through the web of life on which our civilization depends.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress