deficit

Deficit fatigue has set in as large scale deficit spending has become politically unacceptable. Austerity is now in. This has caused a recession throughout Europe and weakened the US. To counteract this fiscal retrenchment, monetary…

That's the headline from my latest talk on RT's Alyona Show. Before I send you to the clip, let me explain my thinking because I don't think I was really clear in the video.

The decision for Europe’s bosses is this: they must ultimately confront the consequences of their policy choices. They can destroy the eurozone by continuing with the same failed mix of policies or by salvaging it by adding what has been…

The chart below from the blog Pragmatic Capitalism shows the U.S. Federal government deficit for each quarter since 1952. As you can see, almost the entire period is marked by deficits.

In conclusion, while there are links between the “twin deficits”, they are not the links usually imagined. US trade and budget deficits are linked, but they do not put the US in an unsustainable position vis a vis the Chinese. If the…

Last week we examined Milton Friedman’s version of Functional Finance, which we found to be remarkably similar to Abba Lerner’s. The only problem with Friedman’s analysis is that he did not account for the external sector: he wanted a…

Spain’s economic problems are very grave. The country is facing a decade long depression, and if enough young qualified people leave during this period then the country could enter a negative dynamic from which it will never properly…

To me this situation looks pretty hopeless frankly. Policy makers in Europe just don't get it. The best we are going to get is austerity and partial monetisation by the ECB until the union breaks or sovereign debtors default and banks are…

To me this situation looks pretty hopeless frankly. Policy makers in Europe just don't get it. The best we are going to get is austerity and partial monetisation by the ECB until the union breaks or sovereign debtors default and banks are…