Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: Inflation

Even Top Liberal Pundits Still Don’t Understand the Division in the Democratic Party

Today a friend of mine sent me a piece by Franklin Foer in The Atlantic. In the piece Foer gives some thought to what ails the Democratic Party, and he comes to a constructive conclusion–the party needs to reach out to the white working class. But the way Foer gets there troubles me. Too many liberal commentators don’t quite understand the division within the Democratic Party, even the ones who are actively trying to understand that division. Let me show you what I mean.

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How Brazil Got the Worst Austerity Program in the World

Brazil’s new president, Michel Temer, has introduced austerity via constitutional amendment, freezing Brazil’s state spending at 2016 levels for 20 years, allowing it to increase only at the rate of inflation. This is really dumb–if Brazil’s population grows, or Brazil has an economic crisis, or Brazil has to go to war, it will be trapped within 2016 fiscal parameters. So as its population grows, the same level of spending will be divided across ever larger numbers of people, and if Brazil gets into major trouble it will only be able to pay for emergency measures by lashing social spending. To make matters worse, the amendment disallows its own repeal for a 10 year minimum, so there is nothing anyone in Brazil can constitutionally do about this ridiculous rule until 2027. But you know what makes this even more incredible? Temer was never elected president of Brazil in the first place. What follows is the bizarre story of how Brazil’s broken constitution empowered a man committed to an absurd political agenda.

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John Oliver Doesn’t Understand How Stein’s Student Debt Policy Works

Last Week Tonight‘s John Oliver recently ran a segment in which he slated Jill Stein’s proposal to eliminate student debt through quantitative easing:

His criticism seemed to suggest that the Federal Reserve is obviously irrelevant in this policy area:

It’s basically akin to saying, ‘I’ll make us energy independent by ordering the Post Office to invade Canada.’ No, Jill. That’s impractical, it’s a terrible idea, and you don’t seem to understand anything about it.

Oliver, who is usually quite perceptive and well-informed, gets this wrong, and he gets it wrong in no small part because monetary policy is complicated and difficult to understand, both in terms of the economics and in terms of the politics. So let’s talk about how Stein’s idea works.

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Donald Trump Gets Something Right: The US Can Avoid Defaults by Printing Money

Donald Trump is getting mocked on the internet for declaring that:

This is the United States government. First of all, you never have to default because you print the money. I hate to tell you. So there’s never a default.

Trump critics are crowing, accusing Trump of being ignorant of economics. There’s a lot of reason to think that Trump doesn’t know his economics (such as the outlandish tax plan he proposed). But this time Trump is right–the government really can avoid defaults by printing money. Here’s how.

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How Austerity Destroyed the British Empire

It’s rarely talked about during Britain’s contemporary debate over austerity, but British austerity has a major 19th century precedent, one that ultimately culminated in the decline and fall of the British Empire.

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