The U.S. government moves closer to a debt death spiral. Arguably, we are already in the beginning phase of this spiral as this rather scary observation points out: The nation’s debt leapt $166 billion in a single day last week, the third-largest increase in U.S. history, and it comes at [...]

Karl Denninger explodes on Paul Krugman and other establishment economists in Proof: Economists Claim 2 + 2 = 8134. Denninger attacks their vulnerability in a different fashion than I have, but reaches similar conclusions: the economic emperors have no clothes. John Maynard Keynes has to be rolling in this grave….. [...]

As the economic crisis approaches the two-year point, it is apparent that “this time is different.”  Few analysts believe that we are going to recover from this Great Recession in a fashion that resembles prior recoveries. Most argue about how long it might run (Japan’s recovery is now two decades [...]

The economic packages employed by the Bush Administration and extended by the Obama Administration are being increasingly questioned. Similar stimulus policies have been used for 50 plus years, although never in doses so large. “Stimulus” is merely a euphemism for inflationism and has been since the ideas of John Maynard Keynes [...]

“My long view for the US is high inflation which will not show up in the government’s fraudulent statistics, along with a declining standard of living, increasing decay and ultimately leading to chaos, societal and government collapse in the US within a decade or two, maybe sooner.” Craig Harris The [...]

The Fed has reached the point where there are two choices — Allow the government to shut down or allow itself to be the Treasury’s ATM machine. Inflation is, as Milton Friedman was fond of saying, “always and everywhere a monetary phenomenon.”  It is insidious. It becomes a part of [...]

Doug Noland at Prudentbear.com has another excellent article in which he argues persuasively that the focus of the government’s effort is wrong and will do additional damage: “The focus remains on financing the old structure.  Indeed, I would argue that the current course of policymaking and market interventions only work [...]

Image via Wikipedia What’s old is new again, or soon to be. Unfortunately, we will probably have to incur an economic collapse before the modern-witch doctors we call economists are finally disgraced. For a variety of reasons, more and more people are questioning the so-called wizards. Rolfe Winkler states: “If [...]

Image via Wikipedia Image via Wikipedia Below is today’s press release from the Fed. I have emboldened a couple of key statements. “With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.” [...]

Image by akseabird via Flickr Image via Wikipedia Apparently things are so good that we are going to make them even better. Are we back in Alice in Wonderland? If this were not so serious, it would be comical. Another stimulus is being discussed. Who possibly could have seen this [...]

Image via Wikipedia The piece below by Peter Boettke summarizes what I think about current economics. The Keynesian model or paradigm is wrong and always has been. Two primary reasons it was adopted were 1) the crisis of the 1930s was misunderstood but demanded “action” of some kind and 2) [...]

Image by Extra Ketchup via Flickr Allan Meltzer is a renowned Monetarist and academic economist. His discussion below of current economic policy and interest rates is important reading. He succinctly captures the issues, discusses the dangers of continuation of current policies and probable outcomes. Emphasis has been added by me. [...]

Image by elasticcamel via Flickr As discussed rather simply in Econ 301 – Clunker Economics macroeconomics rests on a false premise. Despite its fundamental flaw, it is a wonderful political tool in two ways. First, it provides the intellectual cover for politicians to do what they want to do — [...]

Arguably Macroeconomics is not economics. It deals with aggregates, statistics and mathematical models that purport to explain the behavior of the economy. But economics is not about aggregates, it is about human behavior. The building block for meaningful economics must be the individual, not some aggregate called Consumption or Investment. [...]

The referenced article is a talk given at the Chicago Fed. It discusses the Monetarist vs. “Output-gappers” views on inflation and deflation. Monetarists are probably represented best by the late Milton Friedman. Output-gappers are best represented by Keynesians such as Paul Krugman. I favor Friedman as opposed to the output-gap [...]