Monetary Policy

A Historic Fiscal Solution, If We Overcome Convention Fears

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If you haven’t noticed, the major problems at the federal level are bipartisan. The debt-ceiling charade, in particular, demonstrated that leaders of both major parties have no desire to balance their books. Sure, they’ll propose minor cuts to spending projections, but the status quo of deficits suits them just fine. The status quo does not, however, suit taxpayers, ... [click for more]

Federal Reserve Grabs New Powers

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While inflation hawks understandably keep a close watch on the Federal Reserve’s money-creation activities, an equally worrisome Fed activity is taking place right under their noses. Under cover of addressing the financial crisis and recession, the Fed has become the central allocator of credit. As San Jose State University economics professor Jeffrey Rogers Hummel points out in The Independent Review ... [click for more]

Yes We Can

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Speaking from the Rose Garden last week after Senate approval of the bill to raise the debt ceiling, President Obama said about the federal deficit, And since you can’t close the deficit with just spending cuts, we’ll need a balanced approach where everything is on the table. Yes, that means making some adjustments to protect health-care programs like ... [click for more]

An Amy Winehouse Government

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It feels like we’re dealing with an Amy Winehouse form of governing. “These overdoses happen because these guys drink 20 beers and then reach for their heroin,” a friend of mine said after the late star’s recent death, at 27. “You can’t think straight once you’re totally blitzed.” It seems the same with our politicians, overdosed on their own importance. Their ... [click for more]

A Cheer and a Half for the Tea Party

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Were it not for the Tea Party, the debt-ceiling controversy might never have taken place. Kudos on that count alone. It comes as no surprise that the governing class and its boosters in the media portray the Tea Party folks as a collection of bumpkins and idiots who “don’t know the difference between campaigning and governing” — indeed, who would ... [click for more]

Shared Sacrifice: Obama’s Demagoguery

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The most offensive claim made during the debt-ceiling controversy is that there’s a moral equivalence between cutting government spending and raising taxes. President Obama asks for “shared sacrifice” to reduce the budget deficit. In his view, if the government spends more than it takes in — it currently borrows more than 40 cents of every dollar spent — the ... [click for more]

The Collateral Is Us

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The witching hour is nigh and the threat of the U.S. defaulting on the federal debt is being bandied about as if it were the boogeyman. Fear mongers from the left and right both say the country will go belly up unless the debt ceiling is raised by the Aug. 2 deadline, that it will no longer be able to ... [click for more]

The Cause of Current U.S. Deficits and Debt

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Except for a brief period of time in 1835 under President Andrew Jackson, the United States has been in debt since the founding of the Republic. The first reported national debt in 1791 was over $75 million. Congress now spends more than that every ten minutes. Since the last year of the Bush administration, annual federal deficits have exceeded $1 ... [click for more]

Close Down the IMF

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International Monetary Fund director Dominique Strauss-Kahn is out after being charged with sexual assault against a hotel maid in New York. Unfortunately many members of the world’s governing elite stand ready to take his place. Who should succeed Strauss-Kahn — a European or someone from the developing world? If the criterion is the welfare of ordinary people, the answer ... [click for more]

Hidden Inflation and Debilitating Deficits

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After the 2008 financial collapse, many of us called on politicians to let the market correct itself. The government’s expansion of the housing sector and the Fed’s artificially low interest rates caused an unsustainable and thus ultimately destructive boom, which eventually leads to a bust. This explanation of the business cycle won F.A. Hayek the economics Nobel Prize in ... [click for more]
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