ARNOLD KLING
October 23, 2011
Will Higher Education Tip?
October 23, 2011
Newspaper Macroeconomics
October 23, 2011
Bryan's Question and Stagnation
October 23, 2011
Engineering the Financial Crisis
October 22, 2011
Scott Sumner, for the Myth of the Macroeconomy File
BRYAN CAPLAN
October 24, 2011
Stably Wasteful: Why New Tech Won't Gut Higher Education
October 22, 2011
David on 2nd-Best Immigration Policy
October 21, 2011
Paying to Immigrate: Admission Fees vs. Surtaxes
October 20, 2011
How Kahneman Underestimates Luck
October 19, 2011
Quiggin the Pacifist?
DAVID HENDERSON
October 23, 2011
Mankiw's Strange View of Japan
October 22, 2011
A Tax and Transfer Company with an Army
October 22, 2011
Immigration: Taxes vs. Fees
October 21, 2011
My Friend Sarah
October 20, 2011
Abba Lerner on Consumer Sovereignty
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But..but.. interest rates are currently low! Sure, even with low interest rates we can no longer afford to pay back new debt except by issuing even more new debt later, but I've got a really good feeling that interest rates will always be low later, too. It's just like getting an Adjustable Rate Mortgage - what could possibly go wrong?
Government is overrated to an extreme degree at the moment. The problem in Europe is political, not economic. We see the victory of The Finns and other similar political parties as a reaction to the events in Europe, and in some sense there's a feedback loop, but I believe the major arrow of causation is in the other direction. The EU was born at a peak in optimism, a (near) peak in demographics, a peak in the stock market, a peak in peace for the West. Had the EU been born in 1960, there would have been major integration in the 80s and 90s and today they'd have the same financial problem, but also the unified financial system to deal with it. Instead, they launched at the top.
Political, social, cultural and economic forces are all working against the project. This is working at an individual level, for example Europeans are traveling abroad less, and at the national level, as each country considers it's own best strategy.
The centralized, technocratic system is 20 or 30 years away, if they can keep some part of the system alive. Today people talk about Eurobonds, tomorrow they will be trying to convince the Europeans to keep the common market. The best move here, if one wants a unified Europe, is a strategic withdrawal to satisfy public anger. Pushing centralization further at this time will result in total failure by creating an even larger reactive force.
re: "That line could serve as a response to those who say that the United States can afford fiscal expansion because interest rates are currently low.""
It seems to me that line could serve as a response to just about anyone's argument about what to do in anticipation of something happening! Which doesn't make it less true, of course.
All the more reason to legalize the money drop, money without debt.