The Great Recession revived economists’ interest in fiscal policy, i.e. the use of government spending and tax policy to affect the economy (especially in the short run.) This isn’t surprising given the large increases in spending and transfer payments along with significant tax cuts enacted by the Bush administration in 2008 and the Obama administration in 2009.  These two programs together pumped about $2 trillion into the US economy from 2008 to 2011. This marked a sharp turn from the … [Read more...]

https://youtu.be/niu3wt10ek0 Here is a Wall Street Journal headline from April 28: “The U.S. Homeownership Rate Falls Again, Nearing a 48-Year Low.”  “The homeownership rate fell slightly in the first quarter of 2016, dashing hopes that it had finally hit a bottom,” read the lead paragraph. This sounds pretty ominous. Let’s take a closer look; first, here are the data to which the article refers: Now, let’s pull back a bit, to the beginning of the Great Recession: So, the … [Read more...]

  It’s time to check in on inflation!  and debasement! This is the certainty, expressed by Speaker of the House Paul Ryan, that no matter what the data tell us, accelerating inflation and a depreciating currency are just around the corner.  Here are the new readings for April 2016: Inflation: steady as she goes.  Prices overall rose 1.1 percent since April 2015.  If we exclude food and energy prices, the Consumer Price Index rose 2.2 percent over the past twelve months. … [Read more...]