I apologize for my lack of posting, I still haven't had a lot of time to sit down and write, but I compiled a few good posts to read from others that add to my views on economics.
One from Larry Mishel via Mark Thoma:
We're not Broke
This one hammers home what I have been trying to convey in several posts on this blog.
Another from Naked Keynesianism:
The meaning of heterodox economics, and why it matters
I posted this one because it offers a good explanation of heterodox economics, a camp in which I would probably place myself. It is a bit difficult to read if you haven't taken much economics.
Update: Two more from Naked Keynesianism that explain further the MMT position (that there is no debt crisis).
Monetization of debt: what does it do?
There is no public debt problem in the United States
The first is again a bit difficult to read without much economics background, but the second is short and easy to understand.
A Ph.D. student's perspective on Catholic Social Teaching and economics.
Thursday, May 19, 2011
Tuesday, May 10, 2011
Whom Shall I Fear?
or what should I fear? Paul Krugman addresses the recent (unfounded) fears many are having regarding the economy. In particular, people are afraid of rising government deficits, runaway inflation, and a weakening U.S. dollar. I've addressed the deficits many times (and the others a couple of times) on this blog and still believe it is not something to be worried about.
If deficits get too high then we will see the effects of MUCH higher interest rates, high inflation, and currency devaluation. Yet interest rates and core inflation measures are still very low. (And remember, commodity prices are not a very good indicator of inflation because they are highly volatile. So when you feel a hole burning in your pocket at the gas pump, that's not the inflation I am talking about. Those prices are of great importance and are something to be concerned about, but are not a good indication of inflation).
Fear of these things has had drastic consequences for millions of American citizens and the country as a whole (which also has a major impact on the rest of the world).
From Krugman:
The problem in our economy right now isn't the deficit, inflation, or a weakening dollar, it is underutilized resources and high unemployment. These fears have frozen our ability to improve the economy and help those in need, especially the unemployed. This has drastic consequences on the health of our economy, but even worse implications for the health of our society and the fulfilment and development of persons within our society (as I wrote about in this post).
Why should we fear that which is not happening? or that which no matter how many times it is predicted (without solid reasoning) still hasn't happened?
David wrote in Psalm 27: "The LORD is my light and my salvation; whom do I fear? The LORD is my life's refuge; of whom am I afraid?"
I believe he meant that no matter what we face here on earth, we have nothing to fear for God is always with us and because we "believe [we] shall enjoy the LORD'S goodness in the land of the living."
Unemployment IS happening and it is making life unnecessarily difficult for many millions of people. We CAN do something about, but we aren't. Having a job and developing as person are too important to let them be vanquished by fear.
Despite all the suffering caused by unmeployment (and the fears that perpetuate it), David is right, the Lord is always with us, of what should we be afraid?
If deficits get too high then we will see the effects of MUCH higher interest rates, high inflation, and currency devaluation. Yet interest rates and core inflation measures are still very low. (And remember, commodity prices are not a very good indicator of inflation because they are highly volatile. So when you feel a hole burning in your pocket at the gas pump, that's not the inflation I am talking about. Those prices are of great importance and are something to be concerned about, but are not a good indication of inflation).
Fear of these things has had drastic consequences for millions of American citizens and the country as a whole (which also has a major impact on the rest of the world).
From Krugman:
Unemployment isn’t just blighting the lives of millions, it’s undermining America’s future. The longer this goes on, the more workers will find it impossible ever to return to employment, the more young people will find their prospects destroyed because they can’t find a decent starting job. It may not create excited chatter on cable TV, but the unemployment crisis is real, and it’s eating away at our society.
The problem in our economy right now isn't the deficit, inflation, or a weakening dollar, it is underutilized resources and high unemployment. These fears have frozen our ability to improve the economy and help those in need, especially the unemployed. This has drastic consequences on the health of our economy, but even worse implications for the health of our society and the fulfilment and development of persons within our society (as I wrote about in this post).
Why should we fear that which is not happening? or that which no matter how many times it is predicted (without solid reasoning) still hasn't happened?
David wrote in Psalm 27: "The LORD is my light and my salvation; whom do I fear? The LORD is my life's refuge; of whom am I afraid?"
I believe he meant that no matter what we face here on earth, we have nothing to fear for God is always with us and because we "believe [we] shall enjoy the LORD'S goodness in the land of the living."
Unemployment IS happening and it is making life unnecessarily difficult for many millions of people. We CAN do something about, but we aren't. Having a job and developing as person are too important to let them be vanquished by fear.
Despite all the suffering caused by unmeployment (and the fears that perpetuate it), David is right, the Lord is always with us, of what should we be afraid?
Back in Action (sort of)
Phew! Finals are done, but I'm gonna be on the road a lot here the rest of May. So I'll try to get back in the swing of regular posts, but it's likely there won't be too many until June.
If any of you are interested in a particular issue on the news, in politics, or any thing really I would be more than happy to write a post on CST's views on the issue in question. Just leave me a comment, send me a message on facebook, or shoot me an email to adbinder24@yahoo.com!
If any of you are interested in a particular issue on the news, in politics, or any thing really I would be more than happy to write a post on CST's views on the issue in question. Just leave me a comment, send me a message on facebook, or shoot me an email to adbinder24@yahoo.com!
Monday, April 25, 2011
I gotta pass!
No posts til middle of next week...finals are coming! ahh!
Until then, I recommend reading the other blogs on my blog list!
Until then, I recommend reading the other blogs on my blog list!
Thursday, April 21, 2011
Krugman on Taxes and Medicare "consumers"
Here are two very good reads from Paul Krugman. The first is a response to those who refer to Medicare patients as "consumers". His point, I think, falls in line with CST and the dignity of the human person. I think this line of thought should be extended to all "markets" because we are primarily persons and not primarily consumers and thus we should be treated as such.
Patients are not Consumers
The second asks what taxes are for. Those who have read my posts will know that taxes simply act as a drain on the economy by taking away our purchasing power. This is necessary to maintain the value of the dollar and regulate effective aggregate demand. Krugman is right in pointing out that state governments or any governments who are not sovereign in their own currency (Eurozone) must tax in order to remain solvent. Governments sovereign in their own currency do not have this constraint. The Fed doesn't so much PRINT money as it does change the number in our electronic bank accounts. The constraint on sovereign government debt is inflation, not solvency. Here he mentions MMTers which stands for Modern Money Theory (which is less theory and more operational description).
I don't think the effect taxes have on aggregate demand is a secondary issue. In fact, I'd say its primary when we're in a recession. His best observation is this: "We have lots of excess capacity in the economy; the government can easily buy more goods and services without requiring that the private sector buy less." But his next conclusion is wrong, there is no good reason to address the deficit now, and the only reason to address it later is out of concern for inflation and not solvency.
His last paragraph is sadly true. There are many Ph.D. economists who still hold to ideological economies that don't exist, but use lots of fancy jargon to indicate they know what's going on.
What are taxes for?
Do read Krugman's posts! They are short and easy reads.
Patients are not Consumers
The second asks what taxes are for. Those who have read my posts will know that taxes simply act as a drain on the economy by taking away our purchasing power. This is necessary to maintain the value of the dollar and regulate effective aggregate demand. Krugman is right in pointing out that state governments or any governments who are not sovereign in their own currency (Eurozone) must tax in order to remain solvent. Governments sovereign in their own currency do not have this constraint. The Fed doesn't so much PRINT money as it does change the number in our electronic bank accounts. The constraint on sovereign government debt is inflation, not solvency. Here he mentions MMTers which stands for Modern Money Theory (which is less theory and more operational description).
I don't think the effect taxes have on aggregate demand is a secondary issue. In fact, I'd say its primary when we're in a recession. His best observation is this: "We have lots of excess capacity in the economy; the government can easily buy more goods and services without requiring that the private sector buy less." But his next conclusion is wrong, there is no good reason to address the deficit now, and the only reason to address it later is out of concern for inflation and not solvency.
His last paragraph is sadly true. There are many Ph.D. economists who still hold to ideological economies that don't exist, but use lots of fancy jargon to indicate they know what's going on.
What are taxes for?
Do read Krugman's posts! They are short and easy reads.
Wednesday, April 20, 2011
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