Monthly Archive:: March 2011

The Wall of Shame (cont.)

Today is year and in Japan, which means the last few days could be mainly quarter end and year end maneuvers, with a high probability of ‘buy the rumor sell the news’ types of unwinds coming up. This would include the anticipation of another 200,000 new private sector jobs to be reported ...Read More

WARNING- Euro Zone Automatic Fiscal Stabilizers Deactivated!

I now believe that system risk in the euro zone is being grossly under discounted. The implied assumption for the major currency regions is that during a slowdown the automatic fiscal stabilizers- falling government ‘revenues’ and increased transfer payments- will kick in to increase deficit spending, and thereby add the income and ...Read More

Chairman of the Joint Chiefs Adm. Mike Mullen: national debt the greatest national security threat

“Chairman of the Joint Chiefs Adm. Mike Mullen has described our national debt as the greatest national security threat facing our nation, and it’s easy to see why: The world’s biggest debtor nation cannot remain the world’s sole superpower indefinitely.” The larger threat to our national security and well being in general ...Read More

Japan Weighs Scrapping Company-Tax Cut, Lifting Sales Levies

More talk on ‘paying for’ the reconstruction. Fearing they could be the next Greece will ensure they remain in the rut they’ve been in for most of the last two decades. Global austerity continues to push Europe towards the tipping point of where cutting spending and increasing taxes starts raising deficits though ...Read More

Wall of Shame

Unsustainable budget threatens nation March 24 (Politico) — Repeated battles over the 2011 budget are taking attention from a more dire problem—the long-run budget deficit. Divided government is no excuse for inaction. The bipartisan National Commission on Fiscal Responsibility and Reform, under co-chairmen Erskine Bowles and Alan Simpson, issued a report on ...Read More

Harvard’s Mankiw- a disgrace to the economics profession

CAUTION: BE SEATED WHEN READING COMMENTS BELOW: It’s 2026, and the Debt Is Due By N. Gregory Mankiw March 26 (NYT) The following is a presidential address to the nation — to be delivered in March 2026. My fellow Americans, I come to you today with a heavy heart. We have a ...Read More

Plosser on ‘removing accomodation’

Plosser Speach Some comments below: Let me begin by noting that the economy has gained significant strength and momentum since late last summer and seems to be on a much firmer foundation going forward. Consumer spending continues to expand at a reasonably robust pace, and business investment, particularly on equipment and software, ...Read More

Haley Barbour’s ‘innanity’

Barbour slams Obama on taxes, economy By Jillian Harding March 26 (CNN) — Mississippi Republican Gov. Haley Barbour on Saturday criticized President Obama’s economic policies and urged fiscal discipline in Washington. Speaking in Des Moines, Iowa, to a crowd of conservative activists, the potential 2012 GOP presidential contender said, “When the government ...Read More

Dean Baker: Krugman Is Wrong: The United States Could Not End Up Like Greece

Krugman Is Wrong: The United States Could Not End Up Like Greece By Dean Baker March 25 — It does not happen often, but it does happen; I have to disagree with Paul Krugman this morning. In an otherwise excellent column criticizing the drive to austerity in the United States and elsewhere, ...Read More

The Ratings Agencies Should Downgrade the US Government

If I were running any of the ratings agencies I’d immediately downgrade the US Government’s financial obligations to no more than A based entirely on ‘willingness to pay.’ There are two considerations used by all ratings agencies when determining the credit worthiness of a government. They are ‘ability to pay’ and ‘willingness ...Read More