An Ugly Balance Sheet Indeed

Mark Thoma: This is What a Balance-Sheet Recession Looks Like, and It’s Not Pretty: Stephen Gordon says these graphs make him grateful that Canada is not the US: This is what a balance-sheet recession looks like, and it’s not pretty, Worthwhile Canadian Initiative: I had never heard the expression “balance-sheet recession” before this recent episode, …

Yes, Macroeconomics 101 is Correct

“Some Simple Deficit Reduction Arithmetic”: Kash Mansori notes that it takes more than a $100 cut in government spending to cut the deficit by $100. The reason is fairly simple. A cut in government spending causes output and income to fall, and the resulting fall in tax revenue increases the deficit offsetting some of the …

Pain without Purpose

Pain without Purpose: “And here we reach the limits of my mental horizons as a neoliberal, as a technocrat, and as a mainstream neoclassical economist. Right now, the global economy is suffering a grand mal seizure of slack demand and high unemployment. We know the cures. Yet we seem determined to inflict further suffering on …

Axis of Depression

Axis of Depression – NYTimes.com: “So what’s really motivating the G.O.P. attack on the Fed? Mr. Bernanke and his colleagues were clearly caught by surprise, but the budget expert Stan Collender predicted it all. Back in August, he warned Mr. Bernanke that ‘with Republican policy makers seeing economic hardship as the path to election glory,’ …

Budget Sense and Nonsense « The Baseline Scenario

Budget Sense and Nonsense « The Baseline Scenario: “So, let’s recap. The medium-term deficit problem was created by Bush tax cuts and by an unfunded Bush-era expansion of Medicare. The long-term deficit problem is all about Medicare. Yet the only solution that Republicans can think of is reducing spending–but not Medicare spending. Of course, this …

Rational Markets

Justin Fox | The Daily Show | Comedy Central: The Daily Show With Jon Stewart Mon – Thurs 11p / 10c Justin Fox thedailyshow.com Daily Show Full Episodes Political Humor Economic Crisis (Via The Daily Show.) Why regulation, but not regulators, is necessary.

Reading the Employment Report: Focus on Hours, Not Heads – Freakonomics Blog – NYTimes.com

Reading the Employment Report: Focus on Hours, Not Heads – Freakonomics Blog – NYTimes.com: “Any evidence of ‘green shoots’ appearing in recent months disappears in this broader measure. The recession continues apace. If current trends continue, we are in for a frightening time.” (Via Freakonomics Blog.)

Wall Street and the Third World | vanityfair.com

Wall Street and the Third World | vanityfair.com: “The former Communist countries generally turned, after the dismal failure of their postwar system, to market capitalism, replacing Karl Marx with Milton Friedman as their god. The new religion has not served them well. Many countries may conclude not simply that unfettered capitalism, American-style, has failed but …

Krugman vs. Ferguson: Letting the Data Speak – Freakonomics Blog – NYTimes.com

Krugman vs. Ferguson: Letting the Data Speak – Freakonomics Blog – NYTimes.com: “In fact, the recent increase in Treasury yields is almost entirely due to a reduction in the probability of the deflationary (low nominal interest rates) scenario. Score this round for Krugman. While Ferguson wrongly diagnosed the cause of the rise in interest rates, …

Ed Krugman – Stay the Course

Op-Ed Columnist – Stay the Course – NYTimes.com: “The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, it’s déjà vu …