Benjamin Studebaker

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

Tag: Quantitative Easing

What Would Happen if We Returned to the 70% Top Tax Rate?

Alexandria Ocasio-Cortez (D-NY) has been shopping the idea of a 70% top rate of tax on earnings above $10 million. It’s popular proposal, with initial polling showing a solid majority of Americans in favour. While this policy can’t pass this congress, it’s indicative of the kinds of reforms we might see if we organise to elect more politicians like AOC in 2020 and beyond. So what would happen if we elected more AOCs and they enacted this policy?

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Why Italy is in Trouble

Italy finally has a coalition government–consisting largely of Lega Nord and the Five Star Movement, two Euroskeptic populist parties. The new coalition was elected to take Italy in a new direction, but this will prove difficult to do. Italy is a great example of what’s gone wrong in Europe. Let me tell you its story…

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The Trump Infrastructure Plan Has Potential

Our new president-elect has a plan that has serious potential that we should all get really excited about–he wants $1 trillion in new spending on infrastructure. This sounds like a lot of money, but our crumbling infrastructure could use even more–the American Society of Civil Engineers estimates we’d need to spend $3.6 trillion to bring our infrastructure up to speed by 2020. Beyond the substantive benefits provided by the new infrastructure, there are tremendous economic advantages. An additional $1 trillion in spending would generate roughly somewhere between 6% and 10% GDP growth over the life of the program, depending on the size of the fiscal multiplier. It would also create piles of new construction jobs in the process. There are however some potential issues with how Trump wants to fund the plan, and we should talk about how to get the maximum benefits from it.

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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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