Global Investors Are Telling Donald Trump His Deficits and National…
Washington is unnerved these days about budget deficits and the national debt. Deficit angst comes along periodically, often as a pretext for cutting social spending. This time, however, there’s genuine cause for alarm. Outsized deficits are par for the course when the economy is in recession or reeling from a shock like the pandemic or the financial collapse; most of… Continue reading
The Economic After Shocks of the Disaster in Japan –…
Natural disasters can strike anywhere, but the heart-wrenching tragedy unfolding in Japan may be unique for modern times, at least economically. In today’s post, we focus on what makes last week’s earthquake and tsunami so different from other natural disasters and why they have put Japan’s economy at real risk. Later this week, we will lay out the implications for…Continue reading
The U.S. Economic Debate Gets a Failing Grade at the…
At the private conference this week convened by the International Monetary Fund (IMF), 30 world-class economists talked for two days about “Macro and Growth Policies in the Wake of the Crisis.†Their discussions provided a reality test for the current economic debate in Washington, and the last decade of U.S. policymaking flunked. Economic ideology not only blinded American policymakers to…Continue reading
Deficits Matter — But Right Now, Not So Much as…
The conventional Washington wisdom is that the key to economic policy today is deficit reduction for 2011, and battles over spending cuts almost certainly will dominate our politics for the next several months. This so-called wisdom is the economic-policy equivalent of snake oil. Britain and Germany both tried it, and now both are struggling with significant slowdowns. The U.S. recovery…Continue reading
The Economics and Politics of Cutting Deficits
The 2011 battle over the budget brings to mind the U.S.-Soviet nuclear arms talks of the 1970s and 1980s. The issue is not whether the antagonists can settle everything at once, but whether each will accept modest concessions and keep on talking until the next round, when more incremental compromises can be reached, and so on into subsequent rounds. Â The…Continue reading
The Real Economic Implications of the Uprising in Egypt
Thanks to globalization, the uprising in Egypt raises serious questions about the impact on Western economies, including America, as well as Egypt’s political and economic development.  The precipitating event for the current unrest almost certainly was a facet of globalization — steadily rising worldwide food prices which hit record levels just before the unrest broke out.   An average household in…Continue reading
The State of the Union and the Real Meaning of…
Last Tuesday night, the President exhorted Americans to raise our economic game and challenged Congress to give us the means to do so. His basic proposition, which comes from mainstream economics and more recently from Bill Clinton’s 1992 economic plan, is that expanding certain national investments can make us more competitive, especially if it’s tied to overall deficit restraint. Moreover,…Continue reading
What the Obama-Hu Meetings Can Mean for the U.S. Economy
Barack Obama and China’s President Hu Jintao have genuinely important economic matters to talk about this week, even if there’s little prospect for any agreements that could materially improve our own economy anytime soon. But President Obama can –– and certainly will –– use these meetings to hammer home his long-term priorities for the U.S.-Sino relationship. And so long as…Continue reading
Why It Matters So Little that Obama’s Jobs Record is…
The great partisan squabble of 2011 over the economy begins this week with the new Congress. Even if some of the rhetoric seems fresh, the core issues likely to become the stuff of real political fights — the terms of entitlement spending, the shape of the tax code, and the value of public investment — are all familiar from battles…Continue reading