What Economists Are Saying About Today’s Bad GDP Numbers

In other words, pushing more spending no matter what.  The Fed such pump out more money into the economy.

Balancing the budget or cutting spending will hurt the economy even more than it is now.

In the first six months of 2011 real GDP grew at an annual rate of only 0.8% per year. At that growth rate, unemployment will rise at about 1 percentage point per year.

I need to see the guts of the numbers, but unless there is something very odd in them, the chance that the unemployment rate will be above 9% in November 2012 just crossed 50% heading upward.

A rational Federal Reserve would:

Begin QE III today.

A rational administration would:

Announce a technical fix to the debt ceiling today: the economy does not need the risk.

Abandon all long-term budget negotiations with anybody who requires cuts to the deficit over the next eighteen months to come to the table: the economy needs stimulus, not contraption.

Take every single uncommitted TARP and TALF and whatever dollar, leverage it up, and throw it at the economy to boost aggregate demand.

via Much Worse GDP Numbers than I Had Expected.

I Forgot About The Balanced-Budget Multiplier

A view simple concept–if you expand government spending and taxation by the same amount, then there is an equivalent increase in national income. Hence, there is more income, but not more national debt.  Great!

I wrote about the concept of the balanced-budget multiplier and of raising taxes and government expenditure by the same amount, dollar for dollar. These ideas were first put on the national stage in 1943 by Paul Samuelson, the Nobel laureate. He argued that such a policy would be one-for-one expansionary: each dollar spent is a dollar of new national income. As long as interest rates are near zero — as they were then and are now — there should be no “crowding out” of private expenditures by government ones.

This is an expansionary change in fiscal policy that won’t require additional increases in the national debt. We should start a dialogue right now about taking such action, before the damage of protracted unemployment worsens.

via Tax and Spend, but Keep Your Balance – Economic View – NYTimes.com.

Coral Gables Can’t Manage The Biltmore

I have written before that the city of Coral Gables has no business owning a large, historic hotel, and the last few years have shown us is that the city is over its head. The city management have been incapable of auditing and managing the hotel’s lease.

Perhaps the hotel should be returned to the federal government and the National Park Service, which has the policies and the money to keep track of what is happening at the hotel without getting itself tied up in unseemly relations with the hotel’s management.

The city will not have the resources and willpower in the future to keep track of the Biltmore, even if it wins a costly legal battle with the lessee, and we will then return to the same problem again.  Certainly, the Biltmore is a great asset for Miami-Dade county, but the city of Coral Gables is too small an operation to care for its historic qualities.

America’s Debt And The Economically Illiterate

From the best and seriously conservative Economist, it is embarrassing to our nation that the US is led by people who haven’t the slightest idea about basic economics, or have chosen to ignore economics for personal advantage.  Either way we are stuck in a stagnant economy, huge unemployment and nothing happening to reverse course.

The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.

via America’s debt: Shame on them | The Economist.

No Future For Nation With These Politicians

These politicians work for a very narrow group of powerful rich who refuse to pay taxes and who reach out to cut back our social safety nets at whatever cost to the community and the middle class.

Boehner isn’t really in charge of the House Republican caucus. The lunatics are. And it looks like they’ve won.

via Lunatics Prevail In House Republican Caucus; Boehner Reportedly Gives Up On Grand Bargain Because It Would Increase Taxes | The New Republic.

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