A funny thing happened on the way to the voting booth: Americans discovered that most federal “stimulus” funds were being used to stimulate government, not the economy. I was on the road recently, driving from my home in southeast Louisiana through a long stretch of Mississippi to Tuscaloosa, Ala., then to the outskirts of...
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I pose this question seriously, not as a physiologist, but as an economic historian. I am provoked to raise the question by an advertisement that Amazon sent me recently, calling my attention a book titled Can Capitalism Survive? Creative Destruction and the Future of the Global Economy. Seeing this sales pitch, my immediate reaction...
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Regime uncertainty has gained increasing recognition as the current economic troubles have persisted with little or no improvement since the economy reached a cyclical trough early in 2009. As described in my 1997 paper, regime uncertainty pertains to “the likelihood that investors’ private property rights in their capital and the income it yields will...
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In a recent commentary titled “Diagnostics and Therapeutics in Political Economy,” I endeavored to show that an analytical understanding of past growth in the government’s size, scope, and power does not permit us to prescribe effective means of stopping or slowing this growth, particularly any simple silver bullet remedy, and I specifically disclaimed any...
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According to an analysis of federal payroll data by USA Today, the federal bureaucracy has flourished during the current recession. The number of Federal employees making salaries of $100,000 or more jumped from 14 percent to 19 percent of civil servants during the recession’s first 18 months and that’s before overtime pay and bonuses...
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When President Obama presented his budget recently for fiscal year 2011, he proposed that the Pentagon’s outlays be increased by about 4.5 percent beyond its estimated outlays in fiscal 2010, to a total of almost $719 billion. Although many Americans regard this enormous sum as excessive, few appreciate that the total amount of all...
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Many economists say deficit spending is crucial to keeping the economy moving. But history tells a different story. ————— Though our current economic troubles are complex, many mainstream economists have endorsed the simplistic Keynesian theory that massive government spending will produce jobs and prosperity. From such Keynesian thinking have flowed the “stimulus” and bailout...
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When the U.S. government wishes to spend more money than it receives as tax revenue, it covers the shortfall by borrowing, and foreign lenders have become increasingly important sources of such borrowed funds.
Reliance on foreign lenders is as old as the republic. Indeed, loans from the French and the Dutch proved critical in keeping the American revolutionaries afloat while they broke from the British Empire and established their independence. Later, the huge foreign debt became a major reason for the new national government’s assumption of the states’ war debts and for the creation of the First Bank of the United States and other measures Alexander Hamilton devised to establish the new government’s credit.
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