Does anybody understand debt? Some - but not many. Today's post is less of my normal extended prose and more of an outline. I've been invited to speak at some writing classes here at the college and this is intended to serve as my speaking notes. Background: What have you heard? Krugman in New York … Continue reading Does Anybody Understand Debt?
Founding Fathers Would Have Opposed A Balanced Budget Amendment – The Purpose of National Government Was to Borrow
Both official Washington and the chattering political classes have spent most of the past 12 months debating how to cut the government budget, reduce deficits, and limit debt. Key groups, and perhaps the most vocal and strident groups in the debate, have been the self-described "constitutional conservatives" and Tea Party types. They have staked out … Continue reading Founding Fathers Would Have Opposed A Balanced Budget Amendment – The Purpose of National Government Was to Borrow
The S and P Downgrade Decision Stinks of Politics and Corruption.
Yves Smith at Naked Capitalism (an unusually good source of very in-depth, timely commentary) offers some strong evidence and analysis of how the S&P decision to downgrade the U.S. debt stinks. I've already talked about how it's really irrelevant at the economic level and how it's not likely to change things substantially. I've also written about how … Continue reading The S and P Downgrade Decision Stinks of Politics and Corruption.
S and P: Not the Best Judge of Credit-Worthiness
The media and the talking heads will no doubt make a big deal about S&P downgrading the U.S. debt from AAA to AA and threatening to go to A in 6 months. But it's really nonsense. The U.S. it is not possible for a sovereign nation with it's own currency, it's own central bank, and … Continue reading S and P: Not the Best Judge of Credit-Worthiness
U.S. Government Debt Downgraded by S&P. What a Farce. And Non-Issue.
Yesterday after the U.S. markets closed, Standard & Poor's downgraded their credit rating on U.S. government bonds. Previously, the U.S. government had enjoyed for over 70 years the highest possible rating: AAA. Now it is "only" going to be AA+. We should note that the other two major bond-ratings agencies, Moody's and Fitch's still rate … Continue reading U.S. Government Debt Downgraded by S&P. What a Farce. And Non-Issue.
How Did U.S. Get $14 Trillion in Debt and Who Is Owed the Money?
A great graphic from The New York Times:
But What About National Debt-to-GDP Ratio? Not a Problem, Really
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
What Is Obama Waiting For?
I'm with Brad Delong and a host of others in wondering just why President Obama doesn't simply do away with this whole silly, unnecessary debate about the debt ceiling. Too much is at risk to continue this charade and silly theatrics. Brad summarizes for us: Does anybody have any doubt that any Republican President--Bush II … Continue reading What Is Obama Waiting For?
More on What Happens If Debt Ceiling Isn’t Raised
I've mentioned in many previous posts that government debt is really not like private debt. Instead government bonds are more like another type of currency or money. The key difference between government bonds and paper money is that bonds pay interest and money doesn't. That's about it. But it's a key point because government bonds, … Continue reading More on What Happens If Debt Ceiling Isn’t Raised
Debt-Ceiling: An Absurd, Unnecessary Law
The debt-ceiling circus in Washington continues as I write this. The Republicans seem bound and determined to ruin the "full faith and credit" of the United States, while President Obama is frustrated that the Republicans won't accept his deals to cut Social Security and Medicare. None of this is necessary. We don't need a debt … Continue reading Debt-Ceiling: An Absurd, Unnecessary Law