EconAir

  At current tax rates, in every year over the next 10 years, the deficit - the increase in the national debt - will be greater than the increase in revenue. A ll the increase in revenue will just pay for the increase in interest expense.   CBO forecast is probably optimistic. By law, the forecast cannot include a recession or any other unusual adverse event like future viruses. Based on past experience, it is likely that at least one recession will occur in the next eight years. In addition, the Trump tax cut is set to expire in 2025. If it is renewed, this will add a few trillion to the forecasted deficit and national debt.   The forecast was made before the new Biden administration spending programs were passed and student debt forgiveness was announced. The spending bills indicate that the cost of switching to renewables, modernizing the electricity grid, and decarbonizing is going to be very high in the future. Related, the cost of containing the consequences of past...

Famous Headline Introduction The usual reasons given for the Great Depression – the stock market crash of 1929 and the later collapse of the banking system – do not tell the whole story. Available economic data indicate (there were no national income accounts in 1929) that a recession had already begun before the stock market crash. The crash of October and November of 1929 was a catalyst that made the recession worse but the partial stock market recovery in early 1930 did not end the recession. Industrial production continued to fall quickly and unemployment rose rapidly in 1930. Continuing farm and businesses failures over the next two years wiped out thousands of small rural banks and threatened total financial collapse in early1933.  For a fuller explanation, we have to go back to the 1920s to see additional reasons for the origins and the rapid decline in output at the beginning of the Great Depression. We have to look at the int...