The Project Syndicate is held out as an independent, quality source of Op Ed discussion. When you scan through the economists that contribute you see quite a pattern and it is the anathema of ‘independent’. There is really no commentary that is independent, if you consider the term relates to schools of thought that an economist might work within. We are all bound by the ideologies and language of those millieu. So I assess the input from an institution (like Project Syndicate) in terms of the heterodoxy of its offerings. A stream of economic contributions that are effectively drawn from the same side of macroeconomics is not what I call ‘independent’. And you see that in the recurring arguments that get published. In this blog post, I discuss Jeffrey Frankel’s latest UK Guardian article (August 29, 2018) – US will lack fiscal space to respond when next recession comes – which was syndicated from Project Syndicate. Frankel thinks that the US is about to experience a major recession and that its government has run out of fiscal space because it is not running surpluses. We could summarise my conclusion in one word – nonsense. But a more civilised response follows.Bill Mitchell – billy blog
Fiscal space has nothing to do with public debt ratios or the size of deficits
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
From Bill in the comments there:
Kelton coined the term "fiscal space" and everyone is using it now. She's pretty savvy at marketing. (e.g. "Deficit Owl.")
ReplyDeleteThat Guardian article is trash from the very first sentence:
ReplyDelete“The US economy is doing well.”
NO. Harvard economists (like this liar who wrote the Guardian article) and the corporate media outlets point to the raging stock market as proof that the US economy is doing well.
The stock market is inflated because corporations are engaging in stock buybacks, which hit a record $1 trillion this year. Buybacks inflate stock value, even though no new goods are created. Inflated stock value boosts CEO incomes, with no increase for workers, thereby widening the wealth divide.
What’s doing well is the financial economy, which benefits only the rich.
The real economy is not doing well, since it is crippled by unemployment, low wages, debt bondage, and runaway inflation in housing prices.
Indeed the European Union’s real economy is $1.6 trillion larger than the USA’s, and China’s real economy is $4 trillion larger.
China has the world's largest real economy, according to the CIA World Factbook:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html
The rest of the Guardian article is too full of garbage for me to waste time debunking.
This is like the 100th time he’s written this same blog in the last 10 years...
ReplyDelete.
ReplyDeleteOFF TOPIC
The state of Arizona is John McCain-happy. Several schools have been renamed for the psychopath. Billboards proclaim his divinity. (Photos at link below.) Huge murals are being painted in his honor. Parades are being planned. Several churches have held services in honor of him. As I type this, former VP Joe Biden is speaking at a Phoenix Baptist church (which, being Christian, loves mass murderers, as long as the victims are foreigners.) Attendees had to purchase tickets in advance.
At noon today, McCain’s rotting corpse will be flown to Washington DC, where his casket will lie in state at the U.S. Capitol Rotunda for everyone to worship. There will be a parade past the Vietnam Veterans Memorial, followed by a private service for U.S. and international leaders.
In Arlington TX, McCain was memorialized before a preseason NFL football game between the Dallas Cowboys and the Arizona Cardinals.
A POW/MIA flag is displayed outside McCain’s office in the Russell building on Capitol Hill in Washington – even though McCain personally made sure that American POWs were left behind and forgotten. The US flag above the building is at half-mast.
The US flag atop the White House was flown at half-mast last weekend, but was raised on Monday. A**holes screamed in protest of this, so Trump lowered the flag again.
On Sunday McCain’s body will be buried at the U.S. Naval Academy in Annapolis, Maryland. Then maybe the world can forget about this worthless P.O.S.
Do you think this madness is limited to Americans?
In Hanoi Vietnam, people are laying U.S. flags and wreaths of flowers and at a stone memorial for McCain, who boasted in 2000, “I will always hate the gooks.” Also in Hanoi, many people have signed a book of condolences for war criminal McCain.
Photos:
https://www.azcentral.com/story/news/politics/arizona/2018/08/26/sen-john-mccain-viewing-funeral-details-released/1105359002/
The whole concept "fiscal space" (popular in IMF and OECD circles) is BS. Bill Mitchell has been pointing that out for years, as have I. Coincidentally I set out some links to relevant articles on Billyblog and old articles on my own blog in the second half of an article I published day before yesterday:
ReplyDeletehttp://ralphanomics.blogspot.com/2018/08/the-imf-has-grasp-of-macro-economics.html
Matt: I don’t blame Bill Mitchell for setting out the same points for the umpteenth time. The only way of getting thru to the idiots at the IMF and OECD is to repeat the same points over and over. It would be nice if those idiots reacted to a simple, clear, logical explanation as to why “fiscal space” is nonsense. Unfortunately they don’t have the brain to do that.