Note: This is an update of an old post. Paul Krugman explains why US government debt never has to be repaid. Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see…
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Krugman is confused about whether inflation or taxation is more contractionary!
Krugman writes: …a deficit ultimately financed by inflation is just as much of a burden on households as one ultimately financed by ordinary taxes, because inflation is a kind of tax on money holders. From a Ricardian point of view,…
Ricardian Equivalence and Hoarding
Ricardian equivalence is the theory that a rise in government deficits 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). The 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 of…
Bankster politics in a Christmas classic
Julia Szabo organized a poll of favorite Christmas movies at a Bluffton faculty/staff celebration and my favorite, Elf, won the poll (yea!). She also passed along some trivia about some of the top movies including this: “It’s a Wonderful Life”…
Posted in Macro
Medianism 