Benjamin Studebaker

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

Tag: Recession

Why Federal Stimulus is Always Too Small

We never seem to learn anything. The global economic crisis of 2008 should have taught us a lot about how governments cope with major economic shocks, but the level of analysis in 2020 has been abysmal. The Great Recession reduced US economic output by 4.2% and destroyed 8.7 million jobs. To counteract the loses, the federal government injected stimulus, first through the Bush administration’s Troubled Asset Relief Program (TARP), and then through the Obama administration’s American Recovery and Reinvestment Act. Combined, these two programs provided about $1.2 trillion. That’s about $285 billion per percentage of point of GDP. It wasn’t enough. The economy recovered very slowly, too slowly for the Obama administration to maintain public support. The Democrats lost the House decisively in 2010. Obama tried to get an additional $447 billion in 2011, but the Republicans had no interest in it. Instead, they pushed for deficit reduction. Obama tried to play nice with them, signing the Budget Control Act in August and making one last push for more stimulus in the Fall. They took his cookies. The second stimulus never happened. As the years went by, rural America continued to lose jobs, and grew more and more resentful, setting the stage for Donald Trump in 2016.

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Why Bernie Sanders Matters More Than People Think

Every time I find a way to say that there is no one like Bernie Sanders, there are people who don’t believe me. Aren’t there other candidates who support the same policies he supports now? Some of them are younger. Some of them aren’t old white guys. Why can’t it be one of them, why can’t it be someone new? Over and over, I have tried to find ways to explain that there is a real difference between Bernie Sanders and everyone else. Today, as Sanders announces his candidacy for the presidency, I’m going to try one more time.

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If Donald Trump Wants to Help Puerto Rico, He Should Help It Become a State

President Trump said he wants to help Puerto Rico deal with its debt (though his administration immediately U-turned on this). The territory has been devastated by multiple hurricanes and a long-running economic crisis. But while disaster aid and debt relief would be very good for Puerto Rico, what it really needs in the long-run is statehood. Here’s why.

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Britain: For the Love of God, Please Stop Theresa May

On June 8 (this Thursday), Britain has a general election. I care deeply about British politics–I’m doing my PhD at Cambridge. But more importantly, Theresa May’s government has managed the country’s economy and public services with stunning fecklessness, and I couldn’t live with myself if I didn’t do my part to point this out.

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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 slashing 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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