Daily Archive: Monday, January 28, 2013

from Karim: January looks ok so far

Agreed with Karim. So far no signs of actual damage from the FICA hike. Even bonds now indicating same. The problem is personal- it’s hard for me to fathom FICA going up that much without some meaningful damage to GDP. So I remain on the sidelines pending more Jan data. ICSC 3% ...Read More

Email exchange on balanced budget multiplier

>    >   (email exchange) >    >   Hi Warren, I’m a bit confused over one point. MEMMT says that only govt deficits (or an >   external sector like foreign) can inject NFAs into nongovt. So if govt runs a balanced >   budget over the years the NFAs left to nongovt will net to 0. >    Yes. >    ...Read More

Monti Proposes More Than EU13.5 Billion in New Tax Breaks, Cuts

The headline is promising but the details don’t read at all well. Italy needs aggregate demand/spending/sales/ouput/employment. Cutting corporate taxes does precious little of that, especially over 5 years beginning 2014. And tax cuts ‘paid for’ by spending cuts tend to reduce demand overall as well, as does fighting tax evasion. And there’s ...Read More