By Fadhel Kaboub*
The ongoing political deadlock over the U.S. government deficit and the national debt is slowly digressing into one of the most devastating economic pains that a financially sovereign government can inflict on itself and on its own people. With the exception of the readers of New Economic Perspectives and MMT-oriented blogs (here, here, here, here, here, and here among others), the vast majority of the public suffers from an acute form of deficit disorder, which can be diagnosed in a variety of ways, but most commonly you will notice that the subject is convinced that:
- the government should balance its budget and pay off its debt in the same way that responsible individuals, households, and businesses do;
- government deficits crowd-out private sector investments;
- government deficits cause inflation;
- government deficits promote inefficient and wasteful government programs; and/or
- the national debt is a burden on future generations and a form of taxation without representation.
By William K. Black
(Cross posted at Benzinga.com)
Raj Chetty has written an op ed in the New York Times designed to counter the abuse the Sveriges Riksbank (Sweden’s central bank) rightly received for its latest embarrassment. Economics does not have a true Nobel Prize, so a central bank decided to create a near-beer variant. The central bankers have frequently made a hash of it, often awarding economists who got it disastrously wrong and inflicted policies that caused immense suffering. This year, not for the first time, the central bankers decided to hedge their bets – awarding their prize to economists who contradict each other (Eugene Fama and Robert Shiller). The hedge strategy might be thought to ensure that the central bank’s prize winners were right at least half the time (which would be an improvement over the central bankers’ batting average in their awards), but that is a logical error. It is perfectly possible for both of the prize winners to be wrong. I’ll explain why I think that is the case in a future article.
By Glenn Stehle
What drove that growth? Solidarity and organized national purpose. Americans worked together as a team during the war, and that solidarity continued into the postwar decades, behind an engaged and economically pro-active government.
–DAN KERVICK, “Market Myths and the Real Drivers of American Progress”
There’s nothing like an existential threat, such as the prospect of complete annihilation of one’s own group, to motivate behavior and focus one’s mind. Kervick’s quote reminded me of this: