Monday, October 25, 2010

Monday update.

On Forbes, John Tamny explains rising commodity prices indicate a falling dollar, not economic strength.

The WSJ critiques the Treasury’s trade balancing proposal as a recipe for further decline.

In any event, how do the world's would-be central planners know what is the ideal trade surplus or deficit? Many factors determine the competitiveness of a country's exports, including productivity, wage flexibility and more. Should nations like Germany that have run prudent fiscal policies, reformed their labor markets and raised productivity be chastised for exporting more goods than they import? Should countries like Australia be penalized for selling natural resources to a developing China that needs those imports to fuel growth? Should China be punished for exporting cheap goods to willing U.S. consumers?...

There was a time when U.S. officials understood that focusing so much attention on trade deficits and surpluses was counterproductive. In 1976, an advisory committee to the Treasury that studied the international economic accounts concluded: "The words 'surplus' and 'deficit' should be avoided insofar as possible . . . These words are
frequently taken to mean that the developments are 'good' or 'bad' respectively. Since that interpretation is often incorrect, the terms may be widely misunderstood and used in lieu of analysis." The world could use such wisdom today.
On The Kudlow Report, Art Laffer worries about the dollar’s future:

On The Daily Caller, Jared Whitley (a friend) argues the Tea Party should focus on growth, including a sound dollar, rather than budget cuts.

At The NYT, former Obama advisor Christina Romer recommends against austerity.

In The WSJ, Keynesian (and cash for clunkers advocate) Alan Blinder advocates short-term rebates and credits, plus increased government spending.

From July, Alan Reynolds analyzes the flaws in Blinder’s model.

Also on Kudlow, Dan Mitchell debates the impact of lower tax rates on the budget deficit:

In The LA Times, Nicole Gelinas suggests letting bad banks fail is necessary for recovery.

On NRO, Reihan Salam recommends streamlining government to reduce debt, but makes no reference to increasing the rate of growth.

1 comment:

  1. Raising taxes to reduce the deficit: A 15% flat tax? And Robert Reich grins and asks what Dan and Larry intend to cut when they do that. Isn't it about time to answer that question?

    The wealthy in America are just going to have to get it through their heads that they are going to have to pay more taxes. The lower middle class and the poor aren't capable of doing it now. Or just see the deficit climb even more and the entire country decline even more. Take your time Americans, you have lots of it on your hands now.