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    Maxine's Essays

    • 21st Century Regress
      Sometimes it seems like the world is going to hell and there's absolutely nothing a girl economist can do about it.
    • What Exactly Are We Crowding Out?
      The current economic downturn isn't a random draw of a black ball from an urn containing white balls and black balls. There's no sampling distribution. Very specific policies and actions landed us here. Now we must decide not only what policies need to be put in place to prevent it happening again, but also what policies would best drive us out of the ditch faster and sustainably.
    • I Wish It Were Only Butter
      We should be giving up some butter if we must. We should not give up education or health investment (or infrastructure or the environment (hello, BP). They may be the only legacies of any value that we pass on to our children and grandchildren.
    • Rational Health Investment?
      The obvious "market solution" is to improve the long run return on investments in health among the disadvantaged through meaningful and effective publicly funded education. The obvious short run "market solution" is to reduce the costs of investment and the shadow price of health for the disadvantaged by providing health insurance cover and reduced out-of-pocket costs.
    • The Socrates Parameter
      To the extent that our limbic systems respond to such engineering by over-riding the judgment of our frontal lobe and to the extent that our frontal lobe is deprived of the information it requires to make a rationally self-interested judgment, we are not only pigs and fools, we are slaves.
    • The Economic Rewards of Virtue
      If individual virtue tempers our "piggy" desires and conditions our choices to something that is both individually and socially better, then the economic rewards of virtue as embodied in and promoted by societal norms and institutions are far greater than we have ever suspected. As economists, we would do well to recognize this when we teach U max.
    • The Market for Morals
      Markets then are places where more is exchanged than goods and services, labor and product, credit, and interest. They are places where we also develop the personal virtues of temperance and prudence and the social virtues of benevolence and justice. When they function well, they produce trust, loyalty, and sympathy among those who trade there.
    • Post-Modern Applied Economics: It’s the Error Term, Stupid
      Maxine believes it’s time to refocus attention and discussion on the error term. It is often where much of the action is in our models. It is where unexpectedly catastrophic events dwell resulting in fat tails. It is where our animal spirits manifest and cause us to do the right thing or the wrong thing or the thing everyone else is doing rather than the self-interested, fully-informed rational thing. It is where God and miracles and chance dwell.
    • Intergenerational Win-Win: Health Insurance, Education, Environment, Infrastructure
      So when we’re talking about fiscal stimulus packages and we’re borrowing from our grandchildren to finance them, we should be thinking about how to use stimulus monies to create value for those grandchildren AND stimulate our economy.
    • Short-term Private Payoffs, Long-term Social Costs
      The real health reform discussion, the one we should be having, is “What must we do to create a health system that is both efficient and fair?” The answer will almost certainly include relegating the private sector to markets where market forces or regulation are effective at aligning short-term private incentives and goals with long-term societal interests. If such markets are scarce or non-existent in health, then the private health sector will be of limited value.
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    05/13/2010

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    the debt as a % of GDP was much higher during WWII:

    http://delong.typepad.com/sdj/2009/06/the-debt-and-the-deficit-in-historical-perspective.html

    we dont hear many poor complaining about the deficit; those who consider it an issue all seem pretty well off...if they think todays deficits are a problem, theres an easy solution...during WWII, those with incomes over $200,000 were taxed at 95%; the debt ratio was brought down during the 50s with a tax as high as 92% on the rich; and the highest tax bracket remained in the 80s through the 60s...

    You said, "He's right that the US must rein in health care costs,[..]"

    He's wrong. There is no reason why then US must rein in health care costs. Quite the opposite. The US should increase health care coverage (i.e. costs), because that benefits Americans and adds money for economic growth.

    There is absolutely no truth to the debt hawk propaganda that "we can't afford it," or the deficit is "unsustainable" or any of the other platitudes related to people, businesses or local governments, but not to a monitarily sovereign nation like the U.S.

    Rodger Malcolm Mitchell
    http://rodgermmitchell.wordpress.com

    Get Zeus to strike down our investment bankers for hubris?

    dean baker seems to have it nailed:

    The Deficit Problem Is Not “We, the People,” It is “You, the Incompetent Elite”
    New York Times columnist David Leonhardt told readers today that the problem of the debt is “we, the people.” Is that so? Was it we the people who were too dumb to see an $8 trillion housing bubble and recognize that its collapse would wreck the economy? No, that was the job of the great Maestro Alan Greenspan and his sidekick Ben Bernanke, the brilliant scholar of the Great Depression. It was also the job of all the economists who do research and opine to the public on the macroeconomy. Virtually all of these highly educated highly intelligent economists either did not see the bubble or insisted it was not worth their time. Our deficit today is due to the collapse of this bubble. If there had been no bubble and the economy was still chugging along with 4.5 percent unemployment, the budget would either be balanced or close enough that no serious person would be expressing alarm (check out the pre-crisis CBO projections).

    http://www.cepr.net/index.php/blogs/beat-the-press/the-deficit-problem-is-not-we-the-people-it-is-you-the-incompetent-elite

    The comments to this entry are closed.

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