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National Debt and Deficit
Blog Contributors Ezra Klein Ezra Klein is the editor of Wonkblog and a columnist at the Washington Post, as well as a contributor to MSNBC and Bloomberg. His work focuses on domestic and economic policymaking, as well as the political system that’s constantly screwing it up. He really likes graphs, and is on Twitter , Google+ and Facebook .
I’m not saying that congressional Republicans don’t care about poor people. But they really care about rich people. So far, the policy agenda they’ve pushed has been a mixture of very expensive tax cuts for the very wealthy and very deep cuts to a lot of programs that focus on the very poor. It’s . . . curious. Think back to the tax deal. The GOP’s demands were: 1) the extension of the Bush tax cuts for high-earners; and 2) a massive cut in the estate tax.
Hey! Even I was tricked by the three-card monte of the recent GOP/AEI research on growth-through-austerity, and I’m trying to watch the red Ace very closely as these conservatives spin the cards around. Where I thought they were actually putting their markers down on the full “growth through austerity” case, where cutting the deficit is the most important thing to do for the economy right now, they each had an escape hatch where they can say “umm, we actually just said growth would be boosted a bit from ‘Non-Keynesian’ elements like confidence. Not that the economy would expand.” Palming the expansionary card, everything left on the table is higher unemployment, lower GDP, and a transfer from necessary services towards corporate tax cuts.
Alan Greenspan continues his efforts to cement his reputation as the worst ex-Fed chairman in history; in today’s FT, he comes out for a repeal of financial regulations designed to prevent a repeat of the crisis for which he, more than any other individual, bears personal responsibility. To be honest, I didn’t know quite how to respond; I was, very nearly, left speechless by the lack of self-awareness on display. But Henry Farrell shows us the way , pointing out that Greenspan’s piece contains this remarkable passage: Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque.
This post by John Taylor is getting a lot of attention, because it does show a striking correlation between investment and unemployment: John Taylor But when Taylor leaps from that correlation to saying that what we need for economic recovery is to “lighten up on the anti-business sentiment coming out of Washington,” I wonder what is going on in his head. I mean, Taylor presents another graph, showing a plunge in fixed investment since 2006: But that’s overall fixed investment. Let’s decompose it:
"Demand, Supply" helps students learn about the principles of economics. The song covers markets, equilibrium, monopolies, incentives, and more. Teachers and students can find out more about the principles taught in this song by visiting Professor Greg Mankiw's economics blog .
Progressive bloggers have many admirable characteristics. They try to rely on real science, not junk science. They look for public policies that reduce suffering. But when it comes to government they often become slightly unhinged, adopting the sort of “faith-based” reasoning that they tend to deride in conservatives. Recently I’ve notice three blog posts by Greg Mankiw that (directly or indirectly) challenged progressive faith in big government.