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Europe’s Next Fiscal Crisis

When I tell journalists and politicians that the European fiscal situation is worse today than it was immediately prior to the crisis, they don’t believe me. What about all the spending cuts, they ask? What about the draconian austerity? And the Troika-imposed fiscal restraint? I tell them it’s mostly been a mirage. It turns out […]

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Japan’s Slow-Motion Fiscal and Monetary Suicide

Remember Bill Murray’s Groundhog Day, the 1993 comedy classic about a weatherman who experiences the same day over and over again? Well, the same thing is happening in Japan. But instead of a person waking up and reliving the same day, we get politicians pursuing the same failed Keynesian stimulus policies over and over again. […]

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The Six Most Important Takeaways from CBO’s New Long-Run Fiscal Forecast

The Congressional Budget Office has just released the 2016 version of its Long-Term Budget Outlook. It’s filled with all sorts of interesting data if you’re a budget wonk (and a bit of sloppy analysis if you’re an economist). If you’re a normal person and don’t want to wade through 118 pages, you’ll be happy to […]

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A Semi-Acceptable Indirect Bailout for Puerto Rico?

I wrote last year about why Puerto Rico got into fiscal trouble. Like Greece and so many other governments, it did the opposite of Mitchell’s Golden Rule. Instead of a multi-year period of spending restraint, it allowed the budget to expand faster than the private sector for almost two decades. As the old saying goes, […]

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Trump, Debt, Taxes, and Inflation

I have no idea whether Donald Trump believes in bigger government or smaller government. Higher taxes or lower taxes. More intervention or less. Sometimes he says things I like. Sometimes he says things that irk me. Politicians are infamous for being cagey, but “The Donald” is an entirely different animal. Instead of using weasel words […]

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Economic Lesson from Europe for Hillary: Higher Tax Rates Are a Recipe for More Red Ink

We can learn a lot of economic lessons from Europe. Never adopt a VAT unless you want much bigger government. Bigger government means lower living standards. Don’t believe Bernie Sanders about the Nordic nations. Today, we’re going to focus on another lesson, which is that higher taxes lead to more red ink. And let’s hope […]

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