The Penn Wharton Budget Model, a think tank headquartered at the University of Pennsylvania, recently released a study claiming former President Donald Trump’s economic plans would add about four trillion dollars to the national deficit over ten years while Vice President Kamala Harris’s economic plans would add about two trillion dollars. Vice President Harris would... Read More

Deficit spending is when government overspends its revenues and issues Treasury bills/bonds to borrow the money to fill the gap. If the debt instruments cannot be sold at the interest rate the Fed is maintaining, the Fed buys the bonds. The US dollar being world currency means that foreign central banks are content to hold... Read More

The political and financial class breathed a sigh of relief when Congress passed the Fiscal Responsibility Act of 2023. The bill suspends the debt ceiling for two years, thus avoiding the establishment’s nightmare of a government default on its debt. Rather, it allows the government to continue adding trillions of dollars of debt that will... Read More

When you crank out five editorial cartoons and a couple of opinion essays a week, not to mention opining on the radio about this issue and that, it is easy to forget about the basics. The big issues. The stuff that really matters to you. It's just as easy to forget to ask: What are... Read More

Readers ask me if Paul Krugman could be correct that deficits don’t matter and that neither does printing endless reams of money with which to purchase the Treasury’s debt instruments that finance the deficits. If people at home and abroad who hold dollars and dollar denominated financial instruments do not care that trillions of new... Read More

One thing you can say about Obama; he never fails to disappoint. Last night's State of the Union Speech is a perfect example. In his typical lofty rhetoric, the president promised to continue to implement his regressive social and economic policies without pause provided his GOP counterparts lend a hand. Aside from his promises to... Read More

When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run... Read More

The US consumer's decade-long spending spree has ended, but there's still an ocean of red ink left to mop up. And with housing prices falling and unemployment tipping 9 per cent, it will take longer to clear the family balance sheet than many had anticipated. Traditionally, the government has helped to ease the pain of... Read More

How do you light a fire under Congress? How do you get these guys to do what they're paid to do? We're 5 years into this slump, millions of people have lost their homes and jobs, 44 million people are on food stamps, the economy is in the tank, and congress won't lift a finger... Read More

The most important and popular social and tax programs in the United States are threatened by a self-styled “Bipartisan National Commission on Fiscal Responsibility and Reform”. The most important and popular social and tax programs in the United States are threatened by a self-styled “Bipartisan National Commission on Fiscal Responsibility and Reform”. Appointed by President... Read More

Global markets have plunged for more than a month, wiping out more than $5.3 trillion in total market value. Ostensibly, the catalyst was Greece's large deficits, but that's only part of the story. Under the terms of the Maastricht Treaty, (aka--the Treaty on European Union) EU countries are not allowed to exceed the treaty's 3... Read More

Barack Obama must choose between high unemployment or large fiscal deficits. It's one or the other. If he chooses to increase government spending and provide a second round of stimulus; unemployment will fall, the output gap will narrow, business confidence will strengthen, and the economy will continue on the path of recovery. If he refuses... Read More