The Unbroken Window

I neglected to comment on this last week: Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses [...]

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Nobel Prize Winner Gary Becker reminds us that it is not pretty. Here is a small excerpt: The disturbingly large present and prospective fiscal deficits of the federal government receive much attention, and deservedly so. Yet the financial situations of many state and local government finances are also in bad shape, and in many respects [...]

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Since the Bureau of Labor Statistic started collecting the data in 2001, the annual average number of jobs that have been “destroyed” in the US economy has been 23.7 million per year or roughly 2 million jobs per month. Now these “jobs” are not the same as employment experiences. Some of the people represented in [...]

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What the Government Purchases Multiplier Actually Multiplied in the 2009 Stimulus Package Much of the recent economic debate about the impact of stimulus packages has focused on the size of the crucial government purchases multiplier.  But equally crucial is the size of the government purchases multiplicand–the change in government purchases of goods and services that [...]

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Orthodox Keynesianism preaches that spending is the driver of economic activity (never mind Say’s Law or Arnold Kling’s idea of PSST). What does such a view imply? Well, the idea is that if people, including the rich, increase their consumption of goods, then it promotes the consumption of goods by all the people in the [...]

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Krugman and the Keynesians argue that this recession is all about plain-vanilla aggregate demand problems. Those who might be put on the right reject that out of hand, and say it is just due to business uncertainty in the presence of political overreach. Here is a link to see where this is all coming from. [...]

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Leftist commentators, particularly Paul Krugman, construct enormous strawmen in regards to the issue of the federal deficit. Let’s be clear as to what the basic issue is. Krugman and his congregation argue that deficits are not that big a deal, and when they say deficits, they mean an annual excess of government spending over government [...]

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Orthodox Keynesians argue that in times when aggregate demand is slack, it makes no difference whether you employ people to dig holes and fill them back up or whether you actually pay people to produce public goods that are valuable. Suppose we accept this proposition – that it doesn’t matter just so long as the [...]

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From Arnold Kling: So, when you overbuild houses in Nevada or condos in Florida, you cannot lure very many people with lower prices. Most unoccupied houses have close to zero marginal value to the vast majority of consumers, just as most unemployed workers have zero marginal product to the vast majority of firms. He was [...]

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I am sure they’ll say it was just one small incident: We know so far that the stimulus signs cost from a few hundred dollars to as much as $10,000, which was the cost for the giant billboard that adorns renovations underway at Washington Dulles airport. The Washington Metropolitan Airports Authority confirms that the $10,000 [...]

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