I could not resist posting this beautiful graph of the current state of the momentousness US debt. The graph is particularly useful for eyeballing the historical path of U.S. debt to GDP. Often pundits will say that our current debt-to-GDP ratio is not unreasonable because it is not too high relative to the period…
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The New York Times has a useful infographic outlining proposals for how to trim the defense budget. The Pentagon has committed to cutting $450 billion in spending over the next 10 years—only a small slice of the tremendous increase in war and defense spending we have seen in the previous 10 years. The graph…
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The Daily Show with Jon StewartGet More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook As it has come to light, from August 2007 to April of 2010 the Fed loaned out over $7.7 trillion to troubled banks. A Bloomberg report reveals that the U.S. government made these secret bailouts…
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James Buchanan and Richard Wagner begin their book Democracy in Deficit by explaining that prior to the absorption of Keynesian economics, the conventional wisdom of Adam Smith prevailed. Adam Smith had observed that: “What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.” This…
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The United States will officially pass the 100 percent debt-to-GDP line on Halloween. This is the first time this has ever happened since World War II. As Zero Hedge reports, We decided to dig into the actual numbers (cancelling out the per capital denominator as it is the same on both sides of the…
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Since last summer, the top 3 ratings agencies (S&P, Moody’s, and Fitch Ratings) have made 196 “super-downgrades” on municipal bonds, according to research popularized in today’s Wall Street Journal. Super-downgrades are defined as cuts of at least three grade-letter scores on the traditional scale used by the firms. For example, when the US treasury…
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In a speech to the Libertarian Party in Indianapolis, Michael Munger gives three things the government has to do to deal with the debt crisis: 1. Cut defense spending by by at least 15%. More than 15% — even better! 2. Sell US bonds in the Social Security trust fund. Also raise the Social…
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The latest effort coming out of Capitol Hill to reduce the debt and avoid default is called the “Gang of Six Plan”, named after its three Democrats and three Republican authors. The plan includes $500 billion in immediate “budget savings”, reductions in marginal income tax rates, and the abolition of the alternative minimum tax….
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In his article in the Summer 2011 issue of The Independent Review, “The Dilemma of Bailouts,” economist Roy C. Smith (New York University) examines why despite its prohibition of taxpayer-funded bailouts, the Dodd-Frank Act has left the financial system exposed to meltdowns and promotes the shifting of risk from large “systemically important” financial firms…
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With the White House and the House of Representatives still at loggerheads over how to resolve the debt crisis, administration officials are turning up the heat, claiming that Washington has only two choices: increase the government’s borrowing capacity beyond the current $14.3 trillion limit or face a catastrophic U.S. Treasury default. If the latter…
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