The Long Run Economics of Debt Based Stimulus
by MN Gordon
Onward vs. Upward
Something both unwanted and unexpected has tormented western economies in the 21st century. Gross domestic product (GDP) has moderated onward while government debt has spiked upward. Orthodox economists continue to be flummoxed by what has transpired.
Here is the United States, since the turn of the new millennium (starting January 1, 2001) real GDP has increased from roughly $10.5 trillion to $18.6 trillion, or 77 percent. Over this same time government debt has spiked nearly 250 percent from about (Read More....)
. . . → Read More: The Debt Ceiling Expired- What Is The Government’s Solution To Jumpstarting The Economy Now?
by MN Gordon Economic Prism
It’s always exciting when money and politics mix. For example, on Friday billionaire investor Warren Buffett told students at Georgetown University it would be “pretty damn dumb” if Congress and President Obama don’t reach an agreement to raise the nation’s debt ceiling. Here at the Economic Prism we delight in the words “damn” and “dumb,” especially when used to describe the country’s leaders.
But unlike Buffett we consider not raising the debt ceiling to be pretty damn smart. Moreover, we’re in favor of Washington gridlock stopping the Treasury from borrowing from tomorrow to pay for things bought yesterday. We’re also supportive of any opportunity to dismantle parts – or (Read More....)
. . . → Read More: Shattering the Debt Ceiling
By MN Gordon,Economic Prism
“To the wise, life is a problem; to the fool, a solution.” – Marcus Aurelius
Harry Reid is a Deadbeat
“We are not a deadbeat nation,” said President Obama on Monday. When you consider the many fine individuals that comprise the nation, President Obama is right. Nonetheless, the nation is governed by deadbeats.
How else can one explain Senate Majority Leader Harry Reid’s letter to President Obama urging him to circumvent Congressional (Read More....)
. . . → Read More: The End of Coercive Transfer Payments
***The following is a guest post for The Debt by Olde Reb***
The headlines screamed that we needed to increase the National Debt to prevent an economic collapse. Wait a minute. Is that the whole story?
Much is said of how the increase of the National Debt ceiling is inflationary, and it surely is. But the gain by the United States government is only temporary. The real profit goes to the Federal Reserve and Wall Street but that profit is hidden from Congress and the public.
There are two conceivable ways the National Debt can be financed. The manner projected in the mass media and by government is that the government borrows from the public. If this was the entirety of borrowing, there would be no inflation. The Fed could handle the transactions as a broker and receive commissions. The money transfer is the same as the payment of taxes but the government would promise to pay interest on the funds. Inflation by this method of financing is not possible.
The second method is to (Read More....)
. . . → Read More: Crimes Of The Federal Reserve And Congress