The Misunderstood National Debt

A colleague asked for my thoughts on this article/column by Michael Manning in the State News, the Michigan State student newspaper, so I thought I'd post it for all. Basically Mr. Manning reaches the right conclusions with a correct, but weak case. In looking at the issue of the size of the U.S. national debt … Continue reading The Misunderstood National Debt

Excess Bank Reserves: Theory vs. Reality

In the macro econ textbooks, the mainstream explanation for money creation is the story of fractional reserve banking where reserves limit the amount of loans made.  In the traditional theory, the central bank (The Fed in U.S.) controls the amount of reserves banks have through either reserve reqmts or open-market operations.  Commercial banks are supposedly … Continue reading Excess Bank Reserves: Theory vs. Reality

History: Chicago School Didn’t Always Support the Banks

In the previous montrous, global financial meltdown (the Great Depression), the leading economists at University of Chicago sang a very different tune from what they promote today.  They actually called for nationalizing the Federal Reserve Banks and giving total control of money creation to government.  They argued it was necessary to provide the proper environment … Continue reading History: Chicago School Didn’t Always Support the Banks