Now Updated with proofreading! Political debates about taxes and tax rates in the U.S. often focus on the rich and claims about the incentive effects of different tax rates. Rarely mentioned these days are the poor. Indeed, the Republican demands in the last few years that tax rates should be cut for the high-income rich … Continue reading Taxes, Incentives, and Being Poor
It's Rick Snyder's incredible flip-flop here in Michigan on so-called "Right to Work" legislation and his claims that it's about "freedom" that brings me back to blogging. Lately I've been getting increased questions about what "Right to Work" really means. So, let me try to cut through the Orwellian rhetoric and explain. So called "Right … Continue reading Is “Right to Work” About Freedom?
The Federal Reserve System is an extremely controversial and largely misunderstood institution. Senators on both the right (Ron Paul) and the left (Bernie Sanders) are highly critical of The Fed. I've shied away from commenting on The Fed because it's a pretty complex subject. Every time I think there's a point to be made, … Continue reading Is The Fed Corrupt or Out of Control?
Blogging time has been in short supply lately. To compound things, I've had a bunch of inter-woven ideas bouncing around in my head that I want to explain, but I've been struggling to figure out how to do it. I've been stuck in the "can't explain this until I explain that which in turn needs … Continue reading Politics and Job-Creation Policies – Disagreements and The Theories Behind Them
Averages, if you're not careful, can as easily mislead as enlighten. It matters a lot which statistical measure of the "average-ness" that's used. A good example comes in the case of the U.S. long-term trend of economic growth. What we're interested in is to what degree the amount of GDP the average household has available … Continue reading The Mean and the Median Tell Two Different Stories
One of the starting points for understanding macroeconomics is to understand basic measures of the economy and what we call the "circular flow" of goods and services. The "circular flow" refers to the idea that firms are the economic "agents" who produce and sell all our goods and services for sale, and that households are … Continue reading GDP and GDI: Two Sides of the Same Coin (Theoretically)
Just a quickie to bring your attention to this, yesterday's close on the U.S. Government bond market as reported by Google Finance. Note the 10 year bond - less than 2%. Bond Maturity Yield (effective interest rate) change in points(percent) 3 Month 0.01% 0.00 (0.00%) 6 Month 0.04% +0.01 (33.33%) 2 Year 0.19% +0.01 (5.56%) … Continue reading US Government Bond Market & Interest Rate Watch – No Signs of Worry Over Deficits, Inflation, or Default
In a previous post, reader Sergei asks Hello, I appreciate your article, however, I still wondering what is the meaning of the National Debt over GDP ratio? My numbers based on the US debt clock http://www.usdebtclock.org/index.htmlshow me that this ratio currently around 98%. Could you briefly explain what is the meaning behind this number? Others might … Continue reading Is Debt-to-GDP a Good Measure?
In the whole crazy, unnecessary debate over raising the debt-ceiling law, politicians, reporters, and commentators all spoke as if there were only two ways to reduce the government deficits. Nearly everyone took it as an article of "serious thinking" that to reduce a deficit requires either reducing spending or increasing taxes. But rather than being … Continue reading There Is An Efffective Way to Reduce Government Deficit: Employment. But They Won’t Take That Route.
In the comments to my post on the extraordinarily weak 2nd qtr 2011 GDP numbers a reader asks for my thoughts about debt-to-GDP ratio and "how can we afford more stimulus"? Since my response will be a little long and others might be interested, I'll post it here. Reader AZLeader asks: Here are some other GDP … Continue reading But What About National Debt-to-GDP Ratio? Not a Problem, Really