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September 20, 2004

Budget, Debt, and Deficits
Who is in more financial trouble: social security or the rest of the government?

There is a common sense that social security is bankrupt and people now in their 20s and 30s won’t get anything from it. That is false. Social security can fund all projected benefits until someti…

November 6, 2004

Will Japan be able to stay on the sidelines for long?

Some facts: 1) In 2003, Japan increased its reserves by $200 billion, emerging Asia by $245 billion. The world as whole increased its reserves by $500 billion, so Asia accounted for most of the worl…

November 28, 2004

Budget, Debt, and Deficits
Where are the bond market vigilantes?

The typical price of irresponsible fiscal policy is higher long-term interest rates.U.S. fiscal policy has been, in my view, somewhat irresponsible, particularly given the lack of private savings in …

October 19, 2004

United States
The FT has a good article on how the US is funding its trade deficit

The Treasury provides monthly data on foreign purchases of US long-term securities. It is not a complete look at how the US is funding its trade and current account deficit, but it is the best snap …

November 18, 2004

Is it the currency of John Snow and the problem of everyone else?

That headline draws on a nice quote from Steve Barrow of Bear Stearns. It paraphrases the famous saying about the dollar -- I think from Nixon’s Treasury Secretary John Connally -- "it is our curren…

January 3, 2005

Budget, Debt, and Deficits
Borrowing is Saving, Up is Down

Edmund Andrews of the New York Times provides the Rosetta stone that lets us decipher the Bush Administration’s plan to cut the deficit, which seems to be a plan to pretend to cut the deficit. Here i…

October 8, 2004

Capital Flows
Find a way to spend the $18 billion in Iraq!

I have a certain interest in the topic, since in my first and so far only foray into oped writing, I supported the Bush Administration’s call for $20 billion in US grant aid for Iraq (in the end, con…

December 19, 2004

The Teutonic Monetary Policy Tradition

My recent travels took me to old Europe -- and reminded me that the rest of the world is, in many ways, still unprepared for changes set to hit the world economy -- a world economy where the US trade…

January 9, 2005

Financial Markets
The price of a European vacation

As readers of this blog no doubt know, the dollar rallied v. the euro last week. Not that most of America noticed. In much of America’s heartland, the dollar’s value does not make the financial new…

February 1, 2005

United States
One number to watch

My nomination for the single number that best captures the state of total’s world economy -- and a key risk going forward: The annual increase in central banks dollar reserves.It is not exactly a num…