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Should the ECB Buy State Bonds and Encourage State Deficits?

In remarks at Jackson Hole, Wyoming, European Central Bank president Mario Draghi urged greater fiscal and monetary coordination to boost the E.U.’s economy. A ship cannot move along at full speed if all the sails are not coordinated so that each is poised at its optimal angle to the prevailing winds. So too, various policies in a political economy must all sail in the same direction for a full-sail recovery to really take off. Just as a sailing ship must avoid jagged pitfalls lurking in rocky waters, so too must policy makers; for it is all too easy in focusing on one point on the horizon to ignore or dismiss baleful downsides to the dominant policies.




Continue reading Should the ECB Buy State Bonds and Encourage State Deficits?

Should the ECB Buy State Bonds and Encourage State Deficits?

In remarks at Jackson Hole, Wyoming, European Central Bank president Mario Draghi urged greater fiscal and monetary coordination to boost the E.U.’s economy. A ship cannot move along at full speed if all the sails are not coordinated so that each is poised at its optimal angle to the prevailing winds. So too, various policies in a political economy must all sail in the same direction for a full-sail recovery to really take off. Just as a sailing ship must avoid jagged pitfalls lurking in rocky waters, so too must policy makers; for it is all too easy in focusing on one point on the horizon to ignore or dismiss baleful downsides to the dominant policies.




Continue reading Should the ECB Buy State Bonds and Encourage State Deficits?

It Doesn’t Seem Possible, but France Is Going from Bad to Worse

Remember when Paul Krugman warned that there was a plot against France? He asserted that critics wanted to undermine the great success of France’s social model. I agreed with Krugman, at least in the limited sense that there is a plot against France. But I explained that the conspiracy to hurt the nation was being […]

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Europe’s Problem Is Excessive Spending, not Austerity

It’s remarkable to read that European politicians are agitating to spend more money, supposedly to make up for “spending cuts” and austerity. To put it mildly, their Keynesian-based arguments reflect a reality-optional understanding of recent fiscal policy on the other side of the Atlantic. Here’s some of what Leonid Bershidsky wrote for Bloomberg. Just as […]

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Australia’s Worrisome Fiscal Drift

I’m in Australia for Consilium, an annual conference which is hosted by the Centre for Independent Studies. I spoke on fiscal policy and pontificated on the need for nations to restrain government spending. That’s an important message (at least in my humble option), but I thought it was more interesting to learn more about the […]

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Lower Tax Rates > Targeted Tax Credits

Some folks on the right in Washington, generally known as reformicons (short for reform conservatives), want the Republican Party to de-emphasize marginal tax rate reductions and instead focus on providing tax relief to parents. There are many leaders in this movement and, if you want to learn more about the tax proposals being discussed, I […]

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