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Why the long-run value of Bitcoin is near zero.

Economics textbooks say that the three main functions of money are 1) a unit of account (a measurement of value); 2) a medium of exchange; and 3) a store of value. As I wrote earlier, only the first two functions are really unique

Posted in Macro

Zero debt would be an economic disaster.

I often see articles that claim that rising debt is an inherently bad thing. For example, Erik at data-driven thoughts appears alarmed: The average debt that an American holds has increased by 200x since 1943, from ~50 dollars to ~10,300 dollars.

Posted in Macro

Chris House’s Soft Bigotry Of Low Expectations

University of Michigan economist, Chris House gave recommendations for the two most important economics writings for all Americans to read: If I could dictate the reading habits of my fellow Americans, I might put Piketty’s Capital in the Twenty-First Century on the

Posted in Macro

Ricardian Equivalence and Hoarding

Ricardian equivalence is the theory that a rise in government spending will cause taxpayers to increase their savings because they know they will have to pay for it in a future tax increase. Ricardian Equivalence stems from economic models that

Posted in Macro

Racial and gender politics influence Fed governance

The Center for Popular Democracy’s “Fed Up” campaign inspired a letter from Elizabeth Warren and 11 senators and 111 members of the House of Representatives to increase diversity at the Fed.  They complain that: Currently, 92 percent of regional Bank presidents are white,

Posted in Discrimination, Macro

The US federal government owes you $23,871. Really, it does!

Time magazine’s cover is trying to scare economically illiterate people.   Time’s reasoning is exactly the same as the absurd reasoning I used to calculate the numbers in the title above. The U.S. federal government owes 56% of its debt to Americans, so the US government would literally

Posted in Macro, Public Finance

Why do stocks rise faster than incomes? Is that a good thing?

The US stock market has had faster long-run growth than US incomes (GDP).  My FRED graph below shows data for a little more than a half century, but stock values have historically grown considerably faster then incomes since the beginning

Posted in Macro, Medianism

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