Economics

Fatal Flaws of Keynesian Economics

July 23, 2011August 21, 2011 by Chris Banescu

Keynesian Economics Failure by Ron Ross –
It’s now clear that the federal government’s massive stimulus spending has not achieved its objectives. Why hasn’t it? It’s important that we have answers to that question.

The stimulus was premised on the economic model known as Keynesianism: the intellectual legacy of the late English economist John Maynard Keynes. Keynesianism doesn’t work, never has worked, and never will work. Without a clear understanding of why Keynesianism cannot work we will be forever doomed to pursuing the impossible.

There’s no real mystery about why Keynesianism fails. There are numerous reasons why and they’ve been known for decades. Keynesians have an unrealistic and unsupportable view of how the economy works and how people make decisions. [Read more…]

America Slouching Towards Fiscal Armageddon

March 18, 2011March 18, 2011 by Chris Banescu

America is in grave danger. Our government’s out-of-control spending and our politicians’ refusal to implement meaningful budget reforms are leading us towards a fiscal crisis that can undermine our very way of life. We are spending ourselves into oblivion. With each passing day, we are $5 billion in deficit spending closer to the edge of an abyss that can cripple our economy, destroy America’s wealth, and lead to catastrophic social consequences for all current and future generations. Yet our leaders in Washington refuse to face reality and continue to play political games while the country’s budget crisis deepens and the threat grows exponentially.

In February of this year the US federal budget deficit grew by a record $224 billion; the biggest one-month increase in history. Worse still, the 2011 US budget deficit is forecast to reach $1.5 Trillion. According to the non-partisan Congressional Budget Office (CBO) this annual deficit represents the largest budget gap in our country’s history, equivalent to approximately 10% of America’s total economic output. This follows the enormous $1.3 Trillion deficit racked up for 2010 and will be superseded by an equally disturbing $1.65 Trillion deficit forecast for 2012. [Read more…]

Inflation, Back to the ’70s We Go!

March 17, 2011March 18, 2011 by Chris Banescu

Conservatives warned about it, economists predicted it, and now it’s here. Inflation has arrived and it’s taking off like a rocket. IBD reports that wholesale prices, often a precursor to consumer prices, rose at an yearly rate of 8% in February. The story warns: “Food prices today are the highest on record, rising at double-digit rates (see chart). Meanwhile, gasoline tests the $4-a-gallon level, the dollar is weakening and gold is near its all-time high.”

This ominous surge is attributable to very high energy and food prices driven mostly by our government’s reckless spending that’s accelerating rather than abating. Combined with Obama’s suicidal energy policies, continuing political instability across the Middle East, the government’s stifling regulatory hold on our economy, the EPA’s assault on manufacturers and energy producers, and the recent catastrophe and devastation in Japan, a dangerous perfect storm of inflationary and destabilizing factors are emerging which will spell disaster for our economy and negatively affect all American consumers’ purchasing power and wealth. [Read more…]

The Only Way Out for the American Economy

March 4, 2011March 20, 2011 by Chris Banescu

by Steve McCann –
Economic despair reigns in America, as stagnation and mounting debt make our future look hopeless. Yet America is uniquely positioned to rebound and recover our economic preeminence. All that is necessary is a political decision to reverse our energy policy and stimulate domestic production of hydrocarbons. From that would flow a true economic stimulus that would mend many of our ills. [Read more…]

Codes Are Not Enough, Why We Need Ethics

January 18, 2011February 9, 2011 by Chris Banescu

by Chuck Colson –

At the recently concluded meeting of the American Economic Association, the most contentious issue had nothing to do with economics, per se. It wasn’t about “the economics of the organic food system,” or “the costs and benefits of pollution control,” as two of the seminars were labeled.

No, the behavior drawing the most attention, both inside and outside the profession, was ethics — or more to the point, the lack of ethics — of economists themselves.

According to a recent article in Slate magazine, the call of for a “code of ethical standards” comes in the wake of series of “blows to the prestige of the profession.” These include “housing crisis, the credit crunch, the financial crisis, the recession, the collapse of several European economies, and the overhaul of U.S. banking regulation.” [Read more…]

Economic Lunacy

September 13, 2010September 15, 2010 by Chris Banescu

9/13/2010 – Larrey Anderson –
I know logical lunacy when I see it. I may not be an economist, but as one trained in logic as a philosopher, I have been horrified by the recent economic policies of both Presidents G.W. Bush and B.H. Obama.

Let’s start with Bush and the first TARP bill. My heart broke when Bush announced the TARP program. I understood that the $750-billion blank check (to be spent at the discretion of the next Secretary of the Treasury — who turned out to be tax-cheat Timothy Geithner) might well trigger the end of our constitutional republic. [Read more…]

The Obama Recovery

August 23, 2010August 24, 2010 by Chris Banescu

8/23/2010 – Jeffrey Folks –

During the same week in which the president was vacationing in a $50,000-per-night home in Martha’s Vineyard, half a million Americans were standing in line, waiting their turn to apply for unemployment benefits. Those benefits are about $400 a week, not enough to put food on the table, pay the mortgage and car payments, and cover medical and other expenses. Not only that, but they run out (or used to) at 26 weeks. Even with Congress’s election-year largesse, which has tacked on an additional 73 weeks, unemployment benefits must run out at some point. More and more Americans — those who have begun calling themselves the 99ers — are now arriving at that point. [Read more…]