Archive for the ‘Recommended Reading’ Category
Read the PDF linked to by Joe Nocera in his column today. It’s a presentation by Northern Trust chief economist Paul Kasriel about the role of credit contraction in the current economy. Pretty compelling.
Krugman explains the sources of the growth in the deficit from 19.6% of GDP in FY 2007 to 23.8% in FY 2010. Short answer: falling GDP (1.2%), Medicaid and unemployment (2.0%), and stimulus (1.0% and falling fast). More than 3/4 of the increase in spending has been automatic responses to a flagging economy.
But what would have happened under a balanced budget amendment (BBA)?
From William Baldwin via Forbes:
A youngster can put up to $5,000 a year in a tax-sheltered retirement account, but can fund it only with dollars earned working. You can help out with the dollars, but the child has to work in a real job… If your daughter earns $4,000 as a lifeguard, you let her spend that money as she normally would. You come up with the $4,000 to put in the retirement account…