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July 27, 2011 | Cutting the US Deficit: Listen to Bill

Stewart Munn: Bill Clinton is right to use the UK economy as a warning of what can happen if deficit spending is cut too severely. If Republicans get their way in the ongoing deficit negotiations, America’s economy could be headed for a long, painful spell. US politicians should take heed.

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April 25, 2012 | Yuan Not to Blame!

America’s trade deficit with China mounted to a hefty US$295 billion in 2011. ++ China has been accused for allegedly manipulating its currency, thereby driving the US trade deficit. ++ In reality, however, China’s trade surpluses can be explained by an increase in Chinese household savings rates, an East Asian production sharing network revolving around China, and an increase in US

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February 20, 2009 | Old Europe to The Rescue!

The liberalization paradigm, mantra of Eastern Europe in the 90s that aimed to speed up the integration process, is being questioned as the region is devastated by the economic crisis. ++ Old Europe had better help these new member states through measures such as contributions of loans and economic surveillance. ++ Mishandling the crisis would be detrimental for the whole European continent and

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January 23, 2009 | The US Bubble Will Not Be Helped More Debt

Obama spoke of sacrifice, but the only ones sacrificing are the Chinese, Japanese and Saudis who fund America’s debt. ++ These countries are the sole creditor nations able to buy bonds to finance the spending expected by Americans. ++ Once they have invested, these creditors will be trapped, as any attempt to rid themselves of the bonds will collapse their value. ++ America is bloated: 5% of

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January 13, 2009 | Outcome of Return to Keynesianism Is Uncertain

The Fed’s decision to pour tons of new dollars into the US economy has not staved off recession. ++ The government is in fact the main beneficiary of the huge increase in the monetary base: deposits which the public are too uneasy to borrow have been put into the Treasury to be spent by the government. ++ This is Keynesian economics, characterized this time by unparalleled government

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January 12, 2009 | Obama Stimulus: A Necessary Paradigm Shift

President-elect Obama’s stimulus package, now roughly $800 billion, includes “politically expedient” tax cuts which “are widely recognized as packing very little bang for the buck” - $150 billion in business tax breaks and the promised tax cut for all families making $200,000 or less. ++ With a projected deficit of $1.2 trillion, a job loss rate of 510,000 per month and the ever increasing costs

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December 2, 2008 | The US Needs to Spend to Overcome Recession

Public spending, especially on infrastructure and new technologies, is needed to build up steam in this stagnant economy. ++ Building up more state debt and increasing the budget deficit is nothing to worry about right now. ++ Cutting back on spending would do nothing to lower short term interest rates, which are already close to zero. ++ A tight budget could bring long-term rates down a little,

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November 24, 2008 | Keynes to the Rescue

Keynesian economics prevail in times of economic turmoil. ++ Britain should “expect plans for higher borrowing, tax cuts, and more spending in Monday’s pre-Budget statement.” ++ While economists and politicians differ on intervention policies, Keynes emphasized the importance of restoring market confidence and preventing recessions from becoming politically dangerous. ++ “In a depression, a

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October 17, 2008 | Avoid Knee-Jerk Opposition to Government Spending

While reports from stockmarkets dominate the news, what we should really worry about is the shape of our nonfiscal economy. ++ In the US retail sales and industrial production are falling quickly, and it seems like we are in for a much longer period of economic slowdown than we realize. ++ Now is not the right time to worry about the deficit: the only solution to this problem is more government

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April 10, 2008 | Financial and Leadership Deficits

The current financial crisis demands strong governmental actions, particularly in the US. ++ The US’s financial problems can be explained through the debt crisis, credit crunch, and housing bubble which lead to a consumer binge. ++ The government should help homeowners stay in their homes and engage in effective rescues when necessary. ++ This downturn is only made worse by the current US

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