It looks like we are going to repeat the past. In this case, it's 1937. In 1937 the general discussion in U.S. politics had turned to concerns about debt and deficits. The conservative view that opposed both the New Deal and efforts to alleviate the Great Depression began to get the upper hand. Keep in … Continue reading Learning From the Past – Or Maybe Not.
America's attention has been focused lately on the unnecessary debate in Congress over the debt-ceiling law. Part of the motivation (at least the vocalized motivation) for cutting the deficit and trying to limit the national debt, according to both Republicans and the President, is that supposedly government deficits are holding back the economy. They assert … Continue reading Government Budget Cutting SLOWS the Economy – That’s Why It’s Called Contractionary Fiscal Policy
In yesterday's release of the 2nd quarter 2011 GDP numbers for the U.S., the BEA also revised some past numbers. This is not an unusual event. It's routine. But the news and revisions this year were disturbing and sobering. First, a little about how GDP numbers are reported. In this day and age of instant … Continue reading The Great Recession Was Even Worse Than Thought
The Bureau of Economic Analysis released the "advance estimate" of 2nd Quarter 2011 GDP growth. The numbers are bad. Worse than most analysts expected. I'll let BEA explain: Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate … Continue reading GDP for 2nd Qtr: Economy In “Growth Recession” – Very Bad News
Anybody who tells you they know exactly what's going to happen if Congress doesn't raise the government debt ceiling before next week is just making it up. Reality is we don't know for sure. As Brad Delong notes (and Krugman and Nick Rowe), economists don't even have nicely worked-out theoretical models of what happens if … Continue reading What Happens If Government Debt Ceiling Isn’t Raised? 2 Things That Might, 1 That Will, and 1 That Won’t