Why the Deficit Increased

The deficit increased over the last 2 years, but it wasn't because of any "surge" or "explosion" in government spending.  It was because the real economy, which generates the tax revenues, collapsed because of a financial crisis, as the following graph shows.  It wasn't an increase in govt spending. Spending continued to increase at the … Continue reading Why the Deficit Increased

Government, the Private Sector, and “Make Work”

Maxine Udall, Girl Economist, (love that blog title) has an excellent short rif on the topic of "make work" projects.  Tea Partiers, Conservatives, Republicans, radio talk-show hosts and many right-leaning economists (politically right, not as in "correct") frequently attack the idea of government stimulus spending as being simply on "make work" projects.  The implication is … Continue reading Government, the Private Sector, and “Make Work”

The Case of the “Disappearing Stimulus” and the “Illusory Inventory”

Worthwhile Canadian Initiative notes that sometimes, a reported slower GDP growth rate is actually better news than another slightly higher reported rate.  As I've noted repeatedly on this blog and in class, it's important to look at the numbers behind the numbers. When 5.0% GDP growth is better news than 5.9% GDP growth In 2009Q4, … Continue reading The Case of the “Disappearing Stimulus” and the “Illusory Inventory”

Interesting and Good Stuff from This Week

From the Wall Street Journal: Bring Back the Robber Barons .  I think I'll pass. I mean why stop with the robber barons? Why not go all the way back to feudalism where most workers are the personal property of some monied rich baron who's buddy-buddy with the king? From Maxine Udall (girl Economist): Bring … Continue reading Interesting and Good Stuff from This Week