Coral Gables Environment, Politics and Government
July 8, 2011 Leave a comment
It’s important to realize, by the way, that stagnant wages are NOT good for recovery; all they do is ensure that the burden of debt relative to income remains high, keeping demand and employment down.
The situation cries out for aggressively expansionary monetary and fiscal policy. Instead, however, all the political push is in the opposite direction.
July 8, 2011 Leave a comment
It is entirely voodoo economics to reduce government spending in the face of serious unemployment. Consumers are not spending. Business is not expanding and investing. Housing is a mess. Exports are so-so. The only real spender left is the federal government, since state and local governments are still cutting spending and employment.
“Across the board it was a weak [jobs] report,” said Michelle Meyer, a senior U.S. economist at Bank of America Merrill Lynch, in New York. “The recovery is still fragile and growth will continue to be slow. The economy is healing very gradually.”
via U.S. Payrolls Rise 18,000; Jobless Rate Climbs to 9.2% – Bloomberg.
July 3, 2011 Leave a comment
..Keynes denied that the market system had any internal mechanism for maintaining full employment. This meant that economies could drift on for years in a state of semi-slump. Governments should therefore assume responsibility for maintaining full employment. They could do this by securing enough spending power in the economy to employ all those who wanted to work. He invented macroeconomics. This was much more than just ‘sound money’: it involved fiscal and regulatory policy too.
July 2, 2011 1 Comment
…The long-term budget problem in the US is driven mainly by rising health costs, and we have many years to go before this begins to create big budget problems. Thus waiting, say, two years to begin reducing the deficit will not substantially change the probability of big problems down the road. But delaying austerity measures avoids placing a further drag on an already struggling economy, so the likely benefits are relatively large.
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