A popular rebuttal of the idea that the US ought to worry about its surging public debt is, “What about Japan?” America’s taxpayers are currently on the hook for 123% of gross domestic product, exceeding the previous record of 118% in the aftermath of the second world war, and the number is going up.
Perhaps it’s unsurprising that Donald Trump and Kamala Harris are saying nothing about the country’s biggest economic-policy challenge – namely, how to rein in public borrowing. With an election to win, they’d rather emphasize lower taxes and/or higher public spending.
Fiscal conservatism has more or less vanished from America’s political landscape. Government borrowing, despite the strong economy, continues to push public debt to record levels – and the presidential contenders and their parties say scarcely a word about it.
US financial regulators have been working on what’s optimistically known as Basel III Endgame – the long, slow effort to reform global banking rules following the crash of 2008. They’re apparently getting cold feet.
Google’s investors are entitled to be furious about the stunningly incompetent rollout of the company’s Gemini artificial intelligence system. For everybody else, including this grateful Google user and committed technology optimist, it was a blessing.
The apparent disconnect between the state of the US economy and voters’ perceptions of it has puzzled economists for months. Unemployment is low, inflation has come way down and real wages are no longer lagging behind.
Artificial intelligence holds far-reaching consequences for modern economies. Many of the jobs we are asked to do will change; a lot of them might disappear altogether.
Many commentators are struck by the disconnect between the US economy’s impressive performance of late and the dismal popular view of the very same economy.
Federal Reserve Chair Jerome Powell briskly dispensed with the idea of raising the central bank’s inflation target in his speech at the Jackson Hole conference last week. But the idea isn’t going away.
Congress is asking the Federal Reserve and other financial regulators what went wrong at Silicon Valley Bank and why they didn’t see it coming. In due course, they’ll admit some mistakes, draw some lessons and tweak some rules.
Federal Reserve Chair Jerome Powell is justifiably proud of the central bank’s independence — and refreshingly candid about its boundaries.
Their plan has crashed the pound, wrecked the government bond market, and destroyed the Bank of England’s efforts to tighten monetary policy. After such a disastrous start, repairing the damage might be beyond them.
President Joe Biden’s student-debt plan is bad policy in too many ways to count. But is it also bad politics?
In a word, yes: The IRS struggles to administer the system because US taxes are insanely complicated.
Announcing another interest-rate increase on Wednesday, Federal Reserve Chair Jerome Powell said that the path toward a soft landing — with lower inflation and no significant rise in unemployment — has narrowed. The question is whether there is any such path.
Economic policy seems especially susceptible to a certain dynamic. Ideas get fixed too firmly and for too long, so when they’re forced to change, the shift is violent. Narratives drive decisions, and stories shape events, rather than the other way round. The new account of inflation is an arresting example.
The Federal Reserve embarked last week on its long-advertised monetary tightening: a quarter-point increase in interest rates, with the suggestion of six more by the end of the year, and a plan to run down its stock of government debt (details to follow). This was widely expected and essentially a non-event.
President Joe Biden’s Build Back Better plan is stalled, and the next steps are unclear. Some Democrats are talking about the need for new pandemic-relief measures, even as the White House is reportedly looking at a stripped-down version of the original proposal. Meanwhile, most analysts are giving short shrift to an issue that deserves more thought: how Build Back Better would make it harder to fight inflation.
