To prevent a Simpson-Bowles induced depression some form of non-fiscal stimulus would be needed that could provide excess growth to the U.S. economy on the order of 3% per annum over 5 or more years. more »

The problem facing most main-stream economists (and certainly the ones at the Federal Reserve) is that their Keynesian textbooks have taught them that at some "tipping point" the growth rates of the numerator and the denominator of that ratio become inexorably linked, making the ratio unfixable through normal (i.e., relatively painless) means. more »

QE2 is supposed to wrap up sometime in June. The question is: will it actually end in June? Or, to rephrase that question in a more political context: is it in anybody's interest to have it end then? more »

For at least a couple of decades the U.S. government and central bank have pursued policies that minimize pain over the short term while deferring the fiscal consequences to some unspecified later date. more »

Money cannot simultaneously serve as the medium of exchange in a growing capitalist profit-seeking economy, and serve as a store of value. Yet that is what some seem to think possible. more »