Modernize Unemployment Insurance to Restore Government Legitimacy
This is probably where the focus of a lot of efforts needs to go, as much as it might seem small-bore / Clintonian Appetite for tax increases very low. Appetite for spending changes (up or down) also not high. Improving govt services a precondition for rebuilding legitimacy
Avoid Rehashing Fed Gold/ETF Debate if ZIRP Returns
I just hope if we really do end up back at ZIRP that we don’t debate the Fed buying gold or ETF’s, that was bad discourse.
Severe Unemployment & Stock Crash Trigger Major Fiscal Response
If the unemployment rate hits 6% with stocks down 25-30% (roughly the thresholds when we got TARP/CARES Act), we’ll get a big fiscal policy response. But it won’t be actual TARP or CARES, it depends on what the crisis looks...
We Can Cushion Job Losses, Yet Resistance Persists
This is why I think the @Citrini7 scenario is plausible: We demonstrated that we have the power to minimize employment disruptions associated with big supply shocks and shifts in demand... ...but everyone decided they hated it.
Base Case Unlikely
Helpful thought-experiment, but undersells: 1) competition & demand elasticity for cheaper code, 2) how fast monetary & fiscal pol move at 10% U3, & 3) wealth effects/reinvestment bolstering productivity & offsetting wage loss. Tail risk yes. Base case no. https://t.co/BDbOcr4sHF
Waller Doubts AI Fuels Current Productivity Surge
Waller on Monday pushes back on the idea that the ongoing productivity boom is currently being driven by AI. "A.I. at some point will clearly kick in down the road, but I don't think it's going to be in the...
Walller Signals Potential Rate‑Cut Pause Amid Improving Data
Potential pivot by @federalreserve Gov Chris Walller - IF the next retail sales & labor data continue to show signs of further improvement, like we saw in Jan, then would support a pause in rate cuts after dissenting in Jan....
Waller Open to Steady Rates in March if Labor Stabilizes
Waller, a Fed governor who dissented against January's rate cut pause, said he is open to holding rates steady in March if the labor market continues to stabilize. He also doesn't expect the Supreme Court ruling to impact his rate...
Economists Needed to Assess AI’s Macro Economic Impact
We need real economists (@ModeledBehavior, @arpitrage, @tylercowen, Krugman etc) to take a crack at the fast AI scenarios from an NGDP, RGDP, productivity growth, inflation, 30,000-foot macro standpoint. What are the tech/VC/hedge fund people missing?
AI Not Needed to Prevent US Bankruptcy, Model Shows
Early invite to my network, as I am going live in an hour to debunk what Elon Musk says: The U.S. is 1000% heading for bankruptcy without AI. I ran the model. Then I ran it again with correct accounting. The doom loop...
Economists Hide Real Risks of U.S. Bond Dumping
Everyone's worried about foreign countries dumping U.S. bonds, but here's what mainstream economists won't tell you about government finances. The link to the complete presentation is in the comments.
Debt Wall Myth: Accounting Shows Different Reality
The $10 trillion U.S. debt wall has become a political weapon. But the accounting tells a different story than what you'll read in mainstream economics textbooks.
Adjusted Q4 GDP Shows Stronger Growth, Q1 Rebound Expected
Real GDP rose at a 1.4% annual rate in Q4. But the "truth" is better because shutdown-induced real Federal spending cut subtracted 1.15pp. Expect much of that to be added back in Q1. Consumer spending (+2.4%) and business fixed investment (+3.7%)...
Core PCE Inflation Ends Year Elevated, Near 3%
A strong finish to the year for core PCE inflation. And not "strong" in a good way. Annual growth rates. 1 month: 4.3% 3 months: 3.1% 6 months: 2.9% 12 months: 3.0%
90% of Govt Money Creation Neutralized by Bond Sales
I've been teaching this for decades, and now the data proves it: 90% of government money creation between 2000 and 2024 was cancelled out by secondary bond sales. The system we have actively destroys the money governments create. EconomicReform