deficit

I flagged the inevitability of deficit fatigue as early as November 2008. I am sympathetic to the view that these deficits are an attempt to prop up excess credit growth and thus retard full recovery. But I also fear the consequences of a…

I do not take the position that other writers on this blog do that Social Security and Medicare must be protected at all costs. In fact, as you can see above, I outlined very clearly two years ago what is happening politically right now.…

Fear mongers want you to be scared to death that interest rates will skyrocket. As I have said many times in the past, long Treasury rates reflect inflation and interest rate expectations. Full stop. The default risk isn’t there since…

Right now, getting back to full employment should be the first priority. That would go a long way to reducing the deficit

It may not have been the most felicitous choice of phrase, but Mark Halperin’s characterization of Barack Obama was not far off the mark, even if he did get suspended for it.

I have decided to single Klaus Baader out for special treatment here because he conveniently brings together, in a clear and succinct fashion, a number of arguments which are widely accepted and used by both analysts and policy makers about…

When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account…

Randall Wray revisits the Clintonian Goldilocks economy to find the seeds of the Global Financial Crisis, using the sectoral balance approach.

Stephanie Kelton demonstrates that as long as unemployment remains high, the deficit will remain high. Here’s the formula: Spending creates income. Income creates sales. Sales create jobs. If you think you can cut the deficit without…

If the public sector balance must over time move from around -10 percent to around -3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by…