Author Archives: Pavlina Tcherneva

Women Want Jobs, not Handouts

Posted on November 3, 2010 | 3 comments

By Pavlina Tcherneva

(via New Deal 2.0 where it first appeared)

When the White House released its report on the economic security of America’s women, it proposed to improve their well-being with the standard fare of economic policies, usually prescribed for just about any type of problem that ails the job market: more training and education, more tax incentives, and more income support. These prescriptions are already part of the Recovery Act, which for two years has produced dismal economic results. Is more of the same what we need when it comes to improving women’s economic opportunities?

Continue reading →

3 Comments

Posted in Pavlina R. Tcherneva

Tagged ,

Do Not Confuse Solvency with Sustainability

Posted on April 30, 2010 | 5 comments

By Pavlina R. Tcherneva

The Peter G. Peterson foundation held its ‘fiscal summit’ yesterday to address the looming government debt and deficit ‘problem’. According to a TRNN journalist who attended the summit, the conference began with “we know what the problem is, the federal government debt and deficits have become unsustainably large, we need to make hard choices, cut government spending, including on Social Security and Medicare…”
Any sensible person should be scandalized by this purely ideological stance. When it is necessary to go into war, the deficit is never a problem; when we bail out the financial sector, deficit spending is a ‘requirement’, when we build prisons and pack more people in our jails, oh well… But when it comes to paying for the retired and the sick, surely the government can’t afford to do that! Grandma better pull herself by her bootstraps and take responsibility for her retirement or healthcare needs. But even if we get past the propaganda, Peterson and all the deficit hawks are making one fundamental mistake: they are confusing sustainability with solvency.

5 Comments

Posted in Pavlina R. Tcherneva

Tagged ,

What is Responsible Fiscal Policy?

Posted on April 14, 2010 | 18 comments

By Pavlina R. Tcherneva

I can’t fault the taxpayer for being upset with the deficit. I blame my profession, which has been spewing nonsense about government spending for decades. Economics is long-overdue for a renaissance. The deficit phobia, not the deficit itself, should be made public enemy #1. Taxpayers are decidedly working against their own interests when they demand that the government reduce or eliminate its deficit. Here is why:
Government deficits create non-government surpluses. It is a simple mathematical proposition; it is neither high theory, nor rocket science. If one sector spends more than it earns, another, by the rules of double-entry bookeeping, earns more than it spends. And so it is with the government—if it spends more than it collects in taxes, it runs a deficit, which is exactly equal to the surplus accumulated by the non-government sector. Deficits create income and profits for the private sector in excess of the taxes the private sector pays to the government. My fellow bloggers have explained this clearly many times before (e.g. here, here and here).

18 Comments

Posted in Pavlina R. Tcherneva

Tagged

Think Unemployment Claims Show a Glimmer of Hope? Think Again.

Posted on July 9, 2009 | 4 comments

by Pavlina R. Tcherneva

Last week 565,000 people filed first time jobless claims. Although this is the smallest number since January 2009, it is hardly cause for celebration. The unemployment claims data is highly volatile, and numbers reported during holiday weeks are especially poor indicators of employment trends. More telling is the number of continuing unemployment claims, which hit yet another record high of 6,883,000.

While many economists think that the economy is experiencing a labor market shock which will correct sooner or later, data on the duration of unemployment paints a different picture. Problems with the labor market have been brewing for decades.

Continue reading →

4 Comments

Posted in Pavlina R. Tcherneva

Tagged ,

Bring the Stubborn Unemployment Numbers Down Now

Posted on July 2, 2009 | 18 comments

by Pavlina R. Tcherneva

Every month this year (perhaps with the exception of May) economic forecasters were stunned by the unexpectedly high unemployment numbers. Today the Bureau of Labor Statistics reported that in June employers shed 467,000 jobs, pushing the unemployment rate to 9.5%, a 25-year high. With an ever gloomier jobs picture, President Obama’s economic team has started to change its tune with respect to the promised job creation. The first economic report on the job impact of his recovery plan carefully phrased the objectives to include “creating or saving” at least 3 million jobs by the end of 2010. Those early projections called for peak unemployment of 8% in the third quarter of this year, far less than today’s actual unemployment rate of 9.5%

Continue reading →

18 Comments

Posted in Pavlina R. Tcherneva

Tagged , , , ,

A Message to President Obama: Stop Priming the Pump, Hire the Unemployed

Posted on July 2, 2009 | 2 comments
by Pavlina R. TchernevaMany have called President Obama’s stimulus plan a return to Keynesian policy. Some of us who like reading Keynes professionally or for leisure have already been scratching our heads. I have wondered in particular whether the plan isn’t set up to work in a manner completely backwards from what Keynes himself had in mind when he advocated economic stabilization by government.

There are two things to remember about Keynes’s fiscal policy proposals: 1) government spending was always linked to the goal of full employment (the absence of both cyclical and structural unemployment) and 2) to achieve macro-stability and full employment, the government had to employ the unemployed directly into public works.

Continue reading →

2 Comments

Posted in Pavlina R. Tcherneva

Tagged , , ,