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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It must be a condition of employment that a journalist who writes about the current recession include in his article the statement, “consumption makes up more than two-thirds of the economy” or “consumption spending accounts for 70 percent of GDP.” This seemingly simple, factual statement, however, is nearly always intended to carry some explanatory...
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Private saving and investment are the heart and soul of the dynamic market process. Together they provide and allocate the resources used to augment the economy’s productive capacity, generate sustained long-run economic growth, and thereby make possible a rising level of living. Economic crises interrupt this process by discouraging investors and causing them to...
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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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Not everyone has the stomach for perusing the national income and product accounts, but one who does can learn a great deal about what ails the present economy and about its prospects for returning to a healthier condition. (I draw the data I discuss here from Table B-2, Real Gross Domestic Product, 1960-2009, in...
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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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