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BlogBeyond Infrastructure
The topic of the moment, in the wreckage of the debt ceiling fight and the S&P downgrade, is to ask what the government can do to boost employment. The data from Gennaro Zezza’s most recent post suggest that one of the answers to this question is “stop firing so many people.” Beyond stemming the losses [...] -
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To Cut the Debt, Create Jobs
While public discussion in the last several weeks has been absorbed by the debt ceiling saga, and in the coming weeks will probably focus on the S&P downgrade, employment (or lack thereof) is still a major problem. Our employment problem is one of the main factors contributing to a sizeable government deficit and growing public [...] -
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In the Media
Levy Institute Senior Scholar L. Randall Wray was interviewed last week by Radio KPFK for their “Background Briefing.” Listen here to the wide-ranging discussion (beginning roughly a third of the way through the broadcast). Wray also has a piece in The Hill, expanding on his arguments about what lurks behind the hysterical focus on debt [...] -
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The meaning of the federal government’s AA+
Throughout the weekend, television news coverage dwelled on Friday’s downgrade of U.S. debt securities by Standard and Poor’s, one of the three main ratings agencies that assess the creditworthiness of the federal government. The meaning of S & P’s action remains somewhat uncertain, and we doubt that, as important as the story was, the downgrade [...] -
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“We get on very well in private life, but what rubbish his theory is” *
The BBC have broadcast a recent debate, dubbed “Keynes vs Hayek,” featuring Keynes’ biographer Lord Skidelsky. For anyone interested in an entry-level discussion of these competing policy approaches, and plenty of binge-drinking/hangover metaphors, it’s worth a listen. * (Keynes, in reference to Hayek.) -
One-Pager No. 11Investing in Social Care Delivery
There is little mystery to explaining our current high levels of unemployment. The Bureau of Economic Analysis recently revised its figures on GDP growth, and revealed that not only was the recession worse than we realized, but recent growth rates have been overstated as well. The hole, in other words, was deeper than we thought, […] -
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Self-Flagellation, Revisited
Following up on a previous item, Macroeconomic Advisers have updated their analysis in response to the most recent debt ceiling deal. The results: no good news, and some serious uncertainty in the probable effects on growth (though not the sort of “uncertainty” the conventional wisdom is persistently telling us we should care about). In 2012, [...] -
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An update on the Fed and the debt-limit impasse
A deal was reached over the weekend by congressional leaders and the President to resolve the debt-ceiling impasse. By that point, it was clear that the possible way out described by John Carney in a blog post to which we linked on Thursday would not be feasible. Nonetheless, the Fed’s ability to supply cash as [...] -
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Gross Distraction
Bill Gross has weighed in on the debate about excessive sovereign debt, invoking a study produced by Kenneth Rogoff and Carmen Reinhart that purports to show a negative relation between debt and economic growth. The “Maginot line” is a debt ratio of 90%, beyond which economic growth slows by 1%. Yet Mr. Gross does not [...] -
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GDP Revisions and Our Looming Policy Masochism
The economy grew at an unflattering 1.3% annual rate in the second quarter, while first quarter GDP growth has been revised downwards to a wretched 0.4%. Against the backdrop of these abysmal numbers, the US government appears poised to do its best to make matters worse. Even if the debt limit negotiations generate an agreement, [...] -
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A longer-term Keynesian approach to macro policy
Many influential mainstream Keynesian economists continue to support high deficits until the nation’s yawning jobs gap is closed. As Laura D’Andrea Tyson observes in a thorough and helpful blog entry posted this morning, this is not a fine-tuning problem requiring a careful weighing of priorities, given the current state of the job market: Like many [...] -
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Will there be a Fed shutdown?
In a recent blog piece at the CNBC website, John Carney offers this interpretation of the federal debt ceiling (see also Felix Salmon’s more recent comment): “The debt ceiling applies to the face amount of obligations issued under Chapter 31 of Title 31 of the U.S. Code—basically, Treasury notes and bills and the other standard [...]