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Tag Archives: Fiscal Policy

Which American Cities Will File Bankruptcy Next?

We harp on the massive, unsustainable, yet largely unnoticed, debt burdens of American cities, counties and states fairly regularly because, well, it's a frightening issue if you spend just a little time to understand the math and ultimate consequences.  Here is some of our recent posts on the topic: America's Pension Bomb: Illinois Is Just the Start Stanford Says Soaring Public Pension Costs Devastating Budgets For Education And Social Services Pension Consultant Offers Dire Outlook For...

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Putting America’s Record-Breaking $20 Trillion Debt In Global Context

The U.S. federal government just passed a record $20 trillion in publicly held debt. That’s bigger than the entire economy of every country in the European Union, combined. As HowMuch.net notes, the debt will only grow higher unless President Trump and the U.S. Congress can agree to unprecedented spending cuts combined with tax increases.  Don’t count on that happening anytime soon. Most people think that an eye-popping $20+ trillion debt is insurmountable, and in fact, it is the largest in...

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“Japan Has No Illusions That Rates Will Ever Rise”: Is This What The Endgame Looks Like

By Victor Shvets of Macquarie Capital Japan Debt Mountain: does it matter? For almost 25 years, Japan’s debt burden has been the poster child of what would happen to others if capital is misallocated, bubbles burst and then clearance and required reforms are either delayed or not implemented. Indeed, at more than 5x GDP, Japan is shouldering a greater debt burden than other key jurisdictions. It is also facing severe demographic challenges, while its labour market remains constrained and the...

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1 Million Ohio Public Employees Face Pension Cuts As Another Ponzi Teeters On The Brink

We've written frequently of late about the pension crisis in Kentucky where pensioners are facing potentially catastrophic benefit cuts as their politicians finally admit that they've been sold a fantasy for decades (see: Pension Consultant Offers Dire Outlook For Kentucky: Freeze Pension And Slash Benefits Or Else). Unfortunately, Kentucky is not unique as there is a never-ending stream of similar pension failures popping up daily all around the country.  The latest such example comes to us...

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“Worst Possible Choice For US Economy” – Peter Schiff Slams Plan To Repeal Debt-Ceiling

Authored by Peter Schiff via Euro Pacific Capital, Of all the absurd Washington pantomimes none has been as reliably entertaining and maddening as the annual debates to raise the debt ceiling. Although the outcome was always a foregone conclusion (the ceiling would be raised), the excitement came when fiscal conservatives bemoaned the perils of runaway debt and “attempted” to exact spending restrictions through threats “to shut down the government,” (which often led to news coverage of...

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The world is becoming desperate about deflation

The Great Recession may be over, but eight years later we can still see the deep scars and unhealed wounds it left on the global economy. In an attempt to prevent an unpleasant revisit to the Stone Age, global governments have bailed out banks and the private sector. These bailouts and subsequent stimuli swelled global government debt, which jumped 75%, to $58 trillion in 2014 from $33 trillion in 2007. (These numbers, from McKinsey & Co., are the latest, but it’s fair to say they have...

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Kentucky Public Employee Retirements Surge As Fears Of Pension Collapse Mount

Slowly but surely it is becoming increasingly clear to public workers in states with massively underfunded pensions that they've been lied to for the past several decades as their states can't possibly afford to pay for the retirement they've all been promised.  As a local radio station in Bowling Green points out today, fears over potential pension changes in Kentucky have resulted in a surge of early retirements as workers move to lock in payouts before any potential cuts go into effect....

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Emerging Market Debt: Dumb, Dumber, And Dumbest

Authored by Jonathan Rochford via Narrow Road Capital, One of the classic signs that the credit cycle is nearing the end is that borrowers that shouldn’t be getting financed not only get funded, but get it at terms that seem crazy. I’ve recently written about the silly things happening in global high yield debt, Chinese debt and the global attitude to sovereign debt. Continuing this theme are recent examples of emerging market sovereign debt; Greece, Argentina and Iraq. Each of these...

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The Broken State Fallacy – “No, Hurricanes Are Not Good For The Economy”

Authored by Caroline Baum via MarketWatch.com, Yes, GDP may get a temporary boost from rebuilding, but there’s nothing positive about destruction Once the immediate danger of a natural disaster subsides, and the loss of life, property damage, cost of rebuilding, and degree of insurance coverage can be assessed, attention generally turns to the economic effect. How will Hurricane Harvey affect the nation’s gross domestic product? You will no doubt hear assertions that the rebuilding effort...

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Prices and Your Pocketbook

This is another in the series of NBC radio broadcasts that involved Milton Friedman as one of the three panelists. See here and here for earlier posts on the NBC shows. This one shows both Friedman and George Stigler to be believers in fiscal policy to control inflation and advocates of high taxes for the war effort. The three participants are Leo M. Cherne, executive director and editor-in-chief of the...

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