Professor Mark J. Perry's Blog for Economics and Finance
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Is Brian Wesbury pimping for the Obama administration?Maybe he and Robert Schiller (Robert Shiller Says Double Dip Imminent) should compare notes and then have a debate...
Brian is no Obama shill, but I doubt his models recognize that 63.4% of our economy is government spending and the cost of regulations. That's 43% in direct spending, and 20% more in regulation costs, according to Americans for Tax Reform. http://www.fiscalaccountability.org/userfiles/COGD2010_2_final.pdf That 63.4% might be a little high, I would bet on "only" 60%. But it is absurdly high. If we cut government in half, it would instantly double the disposable income of the private sector. Can you imagine the boom?
"Brian is no Obama shill..."...It was a facetious, rhetorical question Tom..."If we cut government in half, it would instantly double the disposable income of the private sector. Can you imagine the boom?"...Absolutely sir!
Tom,The question is which way would get the money out where it is needed?Tax cuts and non govt. spending gets the money to the bank not the public which is where it is needed now!!
Bernanke likes to remind everyone that he is an expert on the great depression and knows how to prevent it from happening again in the US. Apparently he is also an expert on Japan and its struggle with chronic deflation following its housing bubble in the 1980's. In fact Bernanke wrote an article in 2000 titled "Japanese Monetary Policy: A Case of Self-Induced Paralysis," where he goes on to lecture BOJ officials about what they could and should have done differently in order to to avoid a deflationary outcome. He goes on to postulate that the BOJ was not trying hard enough to stimulate the economy and that 0% interest rates are just one tool to beat deflation. The Fed Chairmen even goes so far as to assert that he knows how to escape a liquidity trap caused by 0% interest rates. The reason I bring this up is because it gives people a good idea of what Bernanke's next move may be. The US is dangerously close to falling into the dreaded "liquidity trap" as deflation takes hold and monetary policy loses its effectiveness.Here are some of his suggestions to the BOJ:http://blackswaninsights.blogspot.com/2010/08/bernanke-explains-how-to-escape.html
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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