So stimulus steals from the long run. But does austerity pay? The German politicians think so. Their argument is that the private sector gets insecure about uncertainty and an unsustainable government debt makes the consumer uncertain. Especially any German consumer with a long memory and an eye on the ECB. Are they right? Does austerity pay off?
July 3rd, 2010 | Nickolai Hubble | 1 comment | ContinuedAll Posts Tagged With: "deficit"
We’re Going Broke
“The big deal is that we’re going broke,” we explained. “Until very recently debts of this magnitude were always associated with war. From time to time countries went broke. But they almost always did so because of emergency expenses driven by war. In other words, they were spending money for what looked like a very good reason – self preservation.
July 2nd, 2010 | Bill Bonner | 2 comments | Continued
Budgeting Casualty
Mr. Orszag can’t seem to put a simple sentence together. But he can count. According to the last census results, there were 1.7 million households in America with incomes of $250,000 or more. Even if you took an additional $250,000 in tax from each one of them, raising the effective rate on many of them to nearly 150% of income, it you would still have a trillion-dollar deficit.
July 1st, 2010 | Bill Bonner | 4 comments | Continued
Learning From A Communist
The communists learned their lessons. They proved that government spending does not make people rich. But now…what’s this…? The US and other countries are greatly increasing the percentage of GDP spent by the government.
April 29th, 2010 | Bill Bonner | 2 comments | Continued
Primary Loyalties Are Changing
Whether Greece’s debt crisis ought to have any real affect on the share prices of Aussie banks and resource companies is debatable. What’s not debateable is that stock markets all over the planet are selling off on the down-grading of sovereign debt in Greek and Portugal.
April 28th, 2010 | Dan Denning | 1 comment | Continued
Rock and Hard Place
The developed nations are over-extended, their debt levels are ballooning and their governments are creating copious amounts of money. Put simply, most industrialized nations are now caught between a rock and a hard place.
April 21st, 2010 | Puru Saxena | 1 comment | Continued
Krugman Strikes Again
Although there is far more happening in the world outside of Mr. Krugman’s brain than within it, fresh drivel from the acclaimed Nobel Prize winner compels me to turn my focus there once again.
In today’s column, Krugman analyzes the Greek debt crisis,
US Federal Government Ran the Biggest Deficit in History
In theory, the US government could do the same. But, in fact, it never runs significant surpluses. There are too many people who want too much bread and too many circuses. And you don’t win votes by denying the voters…
September 30th, 2009 | Bill Bonner | 2 comments | Continued
For the GSEs the Rest Has Been History
Even though the GSEs enjoyed lower borrowing costs than other corporate borrowers because of their implied U.S. government guarantee, he said, they would face higher borrowing costs if interest rates spiked. If that were to happen, the GSEs would likely be unable to grow their balance sheets or earnings.
May 14th, 2009 | Dan Denning | 1 comment | Continued
Progressive Taxation Was Never About Fairness
In today’s Daily Reckoning we take a merciless meat axe to the idea that progressive taxation has anything to do with fairness. Quite the contrary. There could be nothing more unfair than stealing from one man and giving to another based on his “ability to pay.”
May 13th, 2009 | Dan Denning | 18 comments | Continued
Were the Government’s Stress Tests a Bogus Exercise in Deception?
Here we go again. Australia’s Federal budget-revealing glorious new deficit, is coming is coming next week. But this week will be all about tomorrow’s Reserve Bank meeting and today’s house price data from the Australian Bureau of Statistics.
May 4th, 2009 | Dan Denning | 0 comments | Continued
Geithner and His Toxic Asset Bailout Plan
Here we go again. Maybe this will be the week that historians look back on and say, “That’s when it all started to get better. Geithner came out with his toxic asset bailout plan. China stimulated. Stock markets bottomed. The crisis ended and the world got better and better forever and ever.”
March 23rd, 2009 | Dan Denning | 5 comments | Continued
A CAP to Replace the TARP
The share market is digesting the ambitious speech Barrack Obama gave to the U.S. Congress. He’s going to cut the U.S deficit in half, increase spending, provide universal health care, improve education, replace oil with alternative energy, introduce a carbon cap and trading scheme…and that’s just before lunch! You have to wonder what kind of Kool Aid the folks in Washington are drinking…
February 26th, 2009 | Dan Denning | 0 comments | Continued
Obama’s Bailout: Too Little, Too Late?
The combination of falling earnings and falling P/Es does to stock prices approximately what the Romans did to Carthage in the third Punic War. That’s why we have our Crash Alert flag flying. Stock prices delenda est. Typically, depressions come with bear markets. And bear markets come with bounces and rallies. We expected an O! Bama! bounce after the election. We got one…but much less than we expected. Stocks only rallied about 15%…
February 19th, 2009 | Bill Bonner | 0 comments | Continued
China is Considering Ways to Diversify Out of the Dollar
Reports in the press this week say that China is considering ways to diversify out of the dollar. The Chinese are no fools. They see what is coming. And they know what it will do to them – the holders of the largest pile of dollars ever assembled. The Financial Times made it perfectly clear to them in a cartoon yesterday. It shows Barack Obama in front of a huge smoking trashcan filled with dollars. The president is pouring on gasoline…
February 16th, 2009 | Bill Bonner | 7 comments | Continued
