After a series of posts examining the fiscal woes of the United States (see here, here and here for example), I have refrained from posting on the issue for the past couple of months, mainly because I have little to add that I have not already said. In short, yes, the US has a longer-term

There is a wealth of debate surrounding the US economy at the moment. The basic tenets of the debate can be summarised as bulls arguing that the current slowdown is the result of high oil prices whacking consumers and the Japanese tsunami whacking production. Bears are arguing there is a structural problem that these shocks

The past week has provided a steady stream of dismal news on the US economy. Let’s start with the housing market, which, after a brief rebound, now appears to be double dipping, with the major indices hitting new post-bubble lows. In the words of S&P, which is not exactly given to hyperbole, “home prices continue

Last week’s GDP figures in the US confirmed the momentum in the US economy’s recovery is slowing as the impetus from stimulus packages and government largesse fades and the true pulse of the economy becomes evident. This trend appears set to continue if last night’s report on the non-manufacturing sector from the Institute of Supply

Ben Bernanke fronted the press following the FOMC meeting earlier this week and told us that QE2 would proeceed as planned and once completed the Fed would “continue to reinvest maturing securities, both Treasuries and MBS, so that the amount that we hold will remain” meaning that “the amount of monetary policy easing should remain

Standard and Poors last night placed the outlook for the US’s AAA rating on negative watch for a potential downgrade citing not just this recent budgetary impasse but also the trajectory of the United States Governments debt position. The charts below show just why S&P is worried.   It’s common these days to think of

I have argued before that while there is no problem with the US running fiscal deficits while its economy regains its feet, in the longer term, reviving non-financial business investment and growing exports faster than imports is the only sustainable way out of the ongoing economic slump. However, this is going to be easier said

Paul Krugman has set off a storm of debate in the US blogosphere this week, with a post in the New York Times that raised the possibility of hyperinflation in the US. Right now, deficits don’t matter — a point borne out by all the evidence. But there’s a school of thought — the modern

In a recent post, “Should the US balance its budget“, I argued that it would be a folly for the US to try to balance its budget in the near term, as this would seriously impede the economy’s recovery from the recent deep recession. But this leaves us with some obvious questions. Is the economy

I have written a series of posts on this blog questioning the wisdom of fiscal austerity in the United States today. Inevitably when I make such an argument, I get comments along the lines of “what about Zimbabwe!”, “it’ll lead to hyperinflation!” and “they’re even worse off than Greece!” But these worries are all based

Deficit hysteria is alive and well in the United States as calls grow to slash spending and return the budget to a “sustainable” position. Today I am going to ask what may seem like a very obvious question: should the US quickly balance its budget or even return it to surplus? Of course it should,

Alan Greenspan has come in for some pretty harsh criticism in the past couple of years about the role he played in inflating the bubble that led to the global financial crisis of 2008. There are two serious charges against Greenspan. The first is the claim that the Fed ran an excessively loose monetary policy

Was it irresponsible lending by the banks? Insufficient regulation? Excessively loose monetary policy by the Fed? There are many theories for what caused the global financial crisis of 2008. But now there’s a new and very novel thesis to add to this list. In a truly bizarre report written in 2009 and released this week,