by Andreas Hoffmann Ever since the beginning of the EMU crisis, politicians, journalists and economists have blamed Germany’s "fiscal austerity" for the prolonged troubles in Europe’s periphery. If only the Germans spent more on goods and services, so the idea, the people in the periphery countries of Europe could sell more stuff. Exports would help … Continue reading The Germans Have Learned Nothing
by Mario Rizzo The expansion of food stamp eligibility in response to the Great Recession was part of the so-called stimulus package. There were several aspects. First, there was a simple increase in the maximum amount allowed to beneficiaries of about 14%. There was also a tremendous drive to get people who are eligible, but … Continue reading The Macroeconomics of Food Stamps
By Richard M. Ebeling Nobel Prizing-winning Keynesian economist, Lawrence Klein died on October 20, 2013, at the age of 93. A long-time professor of economics at the University of Pennsylvania, he was awarded the Nobel Prize in 1980 for his development of econometric (or statistical) models of the United States “macro” economy for purposes of … Continue reading Lawrence Klein: Keynesian Economist Who Wanted to Sidestep the Constitution
by Andreas Hoffmann (University of Leipzig) In a recent piece Jesus Huerta de Soto (2012) argues that the euro is a proxy for the gold standard. He draws several analogies between the euro and the classical gold standard (1880-1912). Like when "going on gold" European governments gave up monetary sovereignty by introducing the euro. Like … Continue reading The Euro: a Step Toward the Gold Standard?
by Mario Rizzo I am not sure which is worse: superstitions based on science or superstitions pure and simple. Many people would react to across the board cuts in government spending by saying something like: “This is crazy; some things are more important than others. We should cut the less important things first.” And, indeed, … Continue reading In Favor of Across-the-Board Cuts in Government Spending
by Mario Rizzo I now favor expiration of the Bush era tax rates for everyone. Why? Because the only way to curb spending in the long run is to make as large a number of Americans as possible truly feel the consequences of the expenditures they appear to desire. If Americans saw the cost of the gigantic welfare … Continue reading Raise Middle Class Taxes Now!
by Andreas Hoffmann and Holger Zemanek* Over the last two years Carmen Reinhart and Belen Sbrancia have published a series of papers on financial repression and its historical role in financing government debt. They show that throughout the Bretton Woods period governments in many advanced economies repressed financial markets to liquidate the high levels of debt that … Continue reading Government Revenues from Low-Interest Rate Policies
by Mario Rizzo Let us suppose that not only the immediate fiscal cliff problem is solved but also the long-run fiscal imbalance is corrected. What then? Presumably federal spending will then be on a sustainable trajectory which is able to cope with cost-of-living increases. Ordinary trend economic growth will already have been figured into the … Continue reading After the Fiscal Imbalance is Resolved: What Then?
by Mario Rizzo There is an interesting interview with Ed Feulner, the outgoing president of the Heritage Foundation, in the weekend (Dec. 8-9) Wall Street Journal. The interview got me thinking about the progress made in the pro-economic-liberty cause, not only over the years of Heritage, but since, say, 1960. I choose this year deliberately … Continue reading Interests are More Powerful than Ideas?
by Mario Rizzo The above table is from the November 8th issue of the Wall Street Journal. The figures for the fiscal cliff consequences are usefully stated for next year and not for the next nine years as those who want to suggest that the numbers are truly impressive (or want to scare children) typically use. Consider … Continue reading Fiscal Cliff: Sense and Nonsense