Larry Summers served as Chairman of the National Economic Council for Barack Obama, so it is rather remarkable that he is admitting that the economy is in deep trouble and that America may be on the verge of long-term, Japanese-style stagnation. Here’s part of what he wrote. From the first quarter of 2006 to the […]

It would not surprise most Americans to hear that unemployment rates are still lingering lower than pre-recession levels. As Dennis Cauchon wrote last week in USA Today: The nation has 5% fewer jobs today — a loss of 7 million — than it did when the recession began in December 2007. That is by far […]

Nancy Pelosi was rightly mocked for her nonsensical assertion that subsidizing unemployment is the best way to stimulate the economy.  Unfortunately, as we pointed out at the time, such claims reflect nothing more than standard Keynesian economics as understood by so many politicians.  Now Sherrod Brown’s saying the same thing: “Congressman Cantor (R-VA) either failed […]

Politicians and journalists who fixate on consumer spending are putting the cart before the horse. Consumer spending generally is a consequence of growth, not the cause of growth. This Center for Freedom and Prosperity video helps explain how to achieve more prosperity by looking at the differences between gross domestic product and gross domestic income.

I’m understandably fond of my video exposing the flaws of Keynesian stimulus theory, but I think my former intern has a great contribution to the debate with this new 5-minute mini-documentary. You may recognize Hiwa. She narrated a very popular video earlier this year on the nightmare of income-tax complexity.

In the latest “Economics 101” video released today by the Center for Freedom and Prosperity Foundation (CF&P), Hiwa Alaghebandian of the American Enterprise Institute punctures a common economic myth used by politicians to justify bigger government. The video, entitled “Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way Around,” dispels the popular Keynesian notion that artificially boosting consumer spending can improve economic performance.

Former Senator Phil Gramm had a column last week in the Wall Street Journal that deserves two blog posts. This first post highlights Gramm’s analysis showing that the U.S. has been very Keynesian compared to Europe, with numerous efforts to jump start the economy with deficit spending. But Senator Gramm hits the nail on the […]

Warren Buffett once said that it wasn’t right for his secretary to have a higher tax rate than he faced, leading me to point out that he didn’t understand tax policy. The 15 percent tax rates on dividends and capital gains to which he presumably was referring represents double taxation, and when added to the tax that already […]

Not that we need more evidence, but here are two new items confirming the absurdity of thinking that bigger government is stimulus. First, we have a story from Los Angeles revealing that the city only created 55 jobs with $111 million of stimulus funds. This translates to a per-job cost of $2 million, which is […]

Alberto Alesina of Harvard’s economics department summarizes some of his research in a column for today’s Wall Street Journal. He and a colleague looked at fiscal policy changes in developed nations and found very strong evidence that spending reductions boost growth. This, of course, contrasts with the lack of evidence for the Keynesian notion that […]