taxes

The headline story here points out very clearly why Japan has two lost decades behind it. The country tries to gin up growth via fiscal and monetary stimulus when it lapses into recession. A gaping hole opens up in the government's books.…

The European fiscal compact which calls for EU countries to stay within the Maastricht treaty government deficit hurdle of 3% of GDP has already been signed off on by all 27 EU governments except the United Kingdom and the Czech Republic.…

I have written quite a few posts highlighting the statements made by Herbert Hoover during his US presidency as he struggled with the economic contraction of the Great Depression. The general tenor of Hoover's comments and actions goes to…

we are seeing an ever shrinking number of people paying an ever greater portion of the taxes. Though they also are the ever shrinking number of people acquiring an ever greater portion of the wealth. There is little that matches the…

Banks, households and the government sector are all engaged in deleveraging. It is difficult to see where aggregate demand will come from. Spanish exports in January were up about 4% from a year ago, but the pace appears to be leveling off.…

In this issue of the newsletter I want to sketch out a scenario in which rather than analyze policy announcements or make predictions I try to lay out what are the various possible paths open to China. The scenario concerns trade. China’s…

Part of the rise of Italy under Monti is a function of how far it had slipped under Berlusconi. Another aspect of Italy's improvement is a function of the Monti's fellow countryman Draghi, who at the helm of the ECB has reversed Trichet's…

Despite the Greek parliament's approval of austerity measures, there is still considerable uncertainty in the Greek situation. This post outlines many of the issues still up in the air.

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…

I have been saying for a few months now that all of the periphery would miss their targets as depression took hold. Belgian newspaper De Standaard reports that the new Spanish government is fearful. My translation from Dutch below.