Wed, 25/01/2023 - 09:00
Paul Krugman on where we stand From his newsletter today (subscription only) ​The U.S. federal government last ran a budget surplus in the fiscal year 2001. (Fiscal years begin in October of the previous calendar year. Don’t ask.) Since then, the government has borrowed roughly $20 trillion. That’s a large number, even for an economy as big as America’s: Federal debt held by the public has roughly tripled as a percentage of gross domestic product, from 32 percent to 94 percent. I argued in my last column that, despite all this borrowing, we are not in any kind of debt crisis. Historically, in fact, U.S. debt isn’t all that unusual. For example, over the past three centuries Britain emerged from each major war with debt as a percentage of G.D.P. well above the current U.S. level, and took many decades to bring that debt ratio back down:Britain has borrowed a lot over the years. Still, the political history of America’s 21st-century deficits isn’t edifying. George W. Bush squandered that 2001 surplus he inherited largely on tax cuts that favored the wealthy and the invasion of Iraq, both sold to the public on false pretenses.
Wed, 25/01/2023 - 07:30
You knew they would be, right? The WaPo reports: House Republicans have started to weigh a series of legislative proposals targeting Social Security, Medicare and other entitlement programs, part of a broader campaign to slash federal spending that could force the new majority to grapple with some of the most difficult and delicate issues in American politics. Only weeks after taking control of the chamber, GOP lawmakers under new Speaker Kevin McCarthy (R-Calif.) have rallied around firm pledges for austerity, insisting their efforts can improve the nation’s fiscal health. They have signaled they are willing to leverage the fight over the debt ceiling — and the threat of a fiscal doomsday — to seek major policy concessions from the Biden administration. So far, the party has focused its attention on slimming down federal health care, education, science and labor programs, perhaps by billions of dollars. But some Republicans also have pitched a deeper examination of entitlements, which account for much of the government’s annual spending — and reflect some of the greatest looming fiscal challenges facing the United States.
Wed, 25/01/2023 - 06:18
Today, I have a few news and information items. First, I detail how to migrate to Mastodon so that you can continue to follow me as I escape Twitter. Second, I provide enrolment details for the next offering of our MMT edX MOOC. Third, I provide access details to my annual Helsinki public lecture which will take place tomorrow starting at 19:00 EAST.
Bill Mitchell – billy blog
Migrating to Mastodon and some additional announcements
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australiael
Wed, 25/01/2023 - 06:16
Since I am in the Modern Monetary Theory (MMT) camp, I cannot write a book on baking without covering some of the critiques of MMT and banking. I wrote about this topic in Section 5.7 of my earlier book, Modern Monetary Theory and the Recovery. In this section, I am give a minimal explanation of the topic, without covering too much of the same ground of that earlier text.
Note: This is a draft of a section that will go into my banking primer manuscript.
Bond Economics
MMT And Banking
Brian Romanchuk
Wed, 25/01/2023 - 06:00
And they’re even more fatuous than usual Charlie Sykes takes it on: In today’s edition of Unfathomable Mysteries: Andrew Sullivan ponders the question: Why is the right losing the young? And what can it do to win them back? It’s worth reading because he gets so much right… and so much very wrong. In the end, Sullivan’s analysis is extraordinarily revealing, but not, perhaps, for the reasons he intends. The problem itself is pretty obvious, as young voters have increasingly been moving away from the GOP, and played a major role in breaking the Red Wave in the midterms. The problem with young women is especially dire, with one exit poll suggesting that “72 percent of women ages 18-29 voted for Democrats in House races nationwide. In a pivotal Pennsylvania Senate race, 77 percent of young women voted for embattled Democrat John Fetterman, helping to secure his victory.” What’s happening here? “It’s dawning on many on the political center and right that the current younger generation in America is not like previous younger generations,” Sullivan wrote last week.
Wed, 25/01/2023 - 05:36
Cryptocurrency was supposed to change the economic outlook for Black America. For many, it made things worse.

Promoters plugged crypto as the key to accelerating Black America’s path to prosperity. It was going to level the playing field once and for all. The world of cryptocurrency was painted as a welcoming place for Black investors leery of traditional finance, a golden opportunity to build wealth and achieve financial empowerment. There was lots of talk of big returns, and few warnings of risks. Exuberance took hold.

But when markets began to crumble, Black people were left holding the bag. Many investors who came in after 2020 are now underwater; some have said goodbye to their life savings. Last in, hardest hit.

Wed, 25/01/2023 - 05:00

“Google announced plans to lay off 12,000 people from its workforce Friday, while Microsoft said Wednesday that it’s letting go of 10,000 employees. Amazon also began a fresh round of job cuts that are expected to eliminate more than 18,000 employees and become the largest workforce reduction in the e-retailer’s 28-year history.” — CNBC, 1/18/23

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There’s no easy way to say this: I have made the difficult decision to lay off over six thousand of you. In the past two years, we have achieved huge wins together. But unfortunately, the macroeconomic environment has shifted in ways none of us could have foreseen, from an economy in which I did feel like paying you, to one in which I’d rather not.