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top identifies the blog time period now displayed menu down the left side shows stats overview selected the remainder of the image is divided into four sections upper left shows pageview count for each minute of the last two hours note the one large spike just before 11 30 am and zero or negligible pageview count for most of the rest of the period here are the minute by minute pageview counts around the time of the spike 11 23 0 11 24 112 11 25 283 11 26 143 11 27 103 11 28 19 11 29 3 11 30 0 11 31 0 11 32 0 other than the zeroes the only halfway realistic number is three pageviews at 11 29 but even that would be hard to do if you were actually reading words or looking at images the rest of the nonzero counts are some kind of nonsense upper right pageview counts for today yesterday the last month etc the total for today 1083 includes the 663 recorded between 11 24 am and 11 29 am this is some bullshit lower right map of the world showing where the pageviews came from the us is pale green meaning a few pageviews came from there russia is dark green meaning most of the pageviews came from there hey russia stop messing with my blog posted by the arthurian at 12 30 pm 0 comments federal debt held by federal reserve banks as a percent of debt other than federal this one is interesting before the crisis we see a continuous down trend except in the good years of the 1960s and immediately before the good years of the 1990s i think the increase since the crisis is exactly what we needed it restores the ratio to the level it held when our economy was good here s the problem last time it took half a century for the ratio to fall but this time the financial technology is already in place to generate private debt so this time the ratio could fall rapidly we don t want the ratio to fall at all we want to keep it near the level it was at in the 1960s to do that we need to fetter the accumulation of private debt the best way to do this would be to eliminate some tax incentives designed to maintain our debt and create some incentives designed to accelerate the pay down of debt note that i am not suggesting that we should introduce policies that reduce new borrowing not yet at least new borrowing gives life to our economy i am proposing that after we borrow and spend the money we should pay off the loan faster this will slow or stop the growth of accumulated private debt and that will be a good thing if it means policy must reverse the tendency toward inequality boosting median income so that people can afford to pay down debt so much the better i ve heard it said that since 1980 or so the suppression of wage increases was part of our anti inflation policy wouldn t it have been better to not suppress wage increases and instead drain off those worrisome excess wages by accelerating the repayment of wage earners debt this would have been an anti inflation policy that was sustainable posted by the arthurian at 4 00 am 0 comments saturday december 17 2016 federal debt held by federal reserve banks as a percent of gdp some people may like this graph because all the action takes place since the crisis but that s exactly what s wrong with it this graph tells us nothing about the time when the problem developed the graph is useless posted by the arthurian at 4 00 am 0 comments friday december 16 2016 federal debt held by federal reserve banks as a percent of gross federal debt posted by the arthurian at 4 00 am 0 comments thursday december 15 2016 when deficits started going up and locating the base year did a couple quick searches seeking how to adjust debt for inflation and then national debt adjusted for inflation by president five sites caught my eye first an oldie from 2008 u s public debt since 1940 adjusted for inflation at economic perspectives adjusting the public debt for inflation provides a good account of federal government borrowing the public debt increased in the 1940s to finance world war ii the public debt remained fairly constant from the late 1940s through 1981 this means the u s was reasonably responsible with its finances collecting sufficient revenues to pay for government services the first four sentences present us with an introduction two observations and a conclusion that conclusion the u s was reasonably responsible with its finances before 1981 collecting sufficient revenues to pay for government services but was it according to christina romer the 1960s introduced americans to the phenomenon of persistent peacetime deficits that s the 60s not the 80s here s what fred has to say about deficits on a bar graph flipped to show deficits above zero and surpluses below graph 2 federal deficits 1945 1992 just by eye there are more and bigger deficits in the 1960s than in the 1950s obviously deficits were bigger in the 1980s than in the 1960s that s not the question the question is what happened before the big deficits were obvious what happened when trouble was still only a brewin in the years before the fit hit the shan that s the question i brought the data from graph 2 into excel and put trend lines on it there s a curved blue trend line that describes the whole period from 1945 to 1992 and there s a straight red trend line that describes only the years from 1950 through 1969 graph 3 deficits and trend 1945 1992 blue and 1950 1969 red obviously deficits were bigger in the 1980s than in the 1950s and 60s bigger in the wartime 40s too the 1950s and 60s were a relative low in federal deficits it s right there on the graph i can see it but the red trend line should make it obvious that deficits were trending upward even in the 1950s and 60s can you see it i say should make it obvious because if you don t want to see it you won t see it no matter how obvious it is even the blue shows the trend of deficits rising since 1960 it shows deficits falling after world war two and rising since 1960 the red line tells us deficits started rising in the 50s so i guess they stopped falling in the 40s federal deficits were increasing since the 1950s deal with it back at fred i found a price deflator for federal spending i took graph 2 changed it from a bar graph to a line graph put the same data on the graph a second time this time in red and used the price deflator to take inflation out of the red one graph 4 federal deficits blue and inflation adjusted federal deficits base year 2009 red the red line rises more steeply than the blue and the numbers are bigger bigger yes removing inflation makes these numbers bigger years back a dollar was worth more than it is today 100 back then was worth more than 100 today so if we show it on a graph in today s dollars the value of 100 back then has to be more than 100 that s why the red line is higher than the blue i know it sounds like doubletalk that s because economists insist on using a recent year like 2009 for the base year if we used the first year on a graph for the base year inflation would make the numbers bigger and removing inflation would make the numbers smaller and it would all make sense when we take a recent year like 2009 for the base year and look backward in time from there removing inflation makes the numbers bigger it sounds like doubletalk because we have to look backward in time when we look at years before the base year we have to think backwards to make sense of it that s hard to do i don t want to do it i want the first year to be the base year bear with me here to remove the effects of inflation from a number you just divide it by a price index number the price index data is a set of numbers that go up following the same path as prices doing the division takes the inflation out of each year s deficit number or out of nominal gdp if you are working with nominal gdp when you do the division and take out the inflation the deflated numbers are smaller than the original numbers but that s only true if you are going forward in time if you are going backward in time from the base year the deflated numbers are bigger than the originals like on graph 4 it s a friggin mess and the whole mess exists only because economists insist on using a recent year for the base year so that most of the years require you to think backward screw that they typically give the base year the value 100 for example the federal spending price deflator i used on graph 4 tells me 2009 100 so after i do the division and eliminate the inflation i have to multiply each number by 100 this makes all the adjusted numbers bigger while keeping them in proportion it also makes the adjusted base year number equal to the original base year number that s why you always see real and nominal gdp lines crossing in 2009 and if they cross in 2005 instead it tells you that the base year of the price index must be 2005 that would be an older price index and probably an older graph but anyway it s dividing by the price index that removes the effects of inflation and it s multiplying by the base year value typically 100 that brings the adjusted numbers up near the original numbers after that long and painful explanation for which i apologize i can get to the point we don t have to multiply by 100 we can multiply by some other year s value if we have 2009 100 and we multiply by 100 the adjusted numbers are 2009 dollars and the lines will cross at 2009 but if the price index value for 1945 is 7 736 you can multiply by 7 736 instead of by 100 multiplying by the number for 1945 makes 1945 the base year the adjusted numbers are 1945 dollars on your graph the lines will cross in 1945 and if there is inflation in the years after 1945 you will see the original inflating line get higher as you would expect and the adjusted line with inflation removed runs low here s an example graph 5 federal deficits blue and deficits with inflation removed red base year 1945 looking forward from 1945 this graph shows the blue line inflated values higher than the red line inflation stripped away on graph 4 looking backward from 2009 the blue line inflated values is lower than the line that shows no inflation it doesn t make sense to show inflated values lower the arithmetic is right on 4 what s wrong is the whole idea of using a base year that is not at the start of the graph graph 5 shows inflating deficits blue higher and rising faster than inflation adjusted deficits as you would expect to see because of inflation and not at all like graph 4 on 5 you can see that the red and blue lines run pretty close together until the mid 60s this agrees with what we know that the great inflation didn t start until around 1965 the space between the red line and the zero line shows the size of the deficits without inflation the space between the red line and the blue line is all inflation you should look at graph 5 and say wow but because the blue line goes up so high the red line is squashed down near the zero line this makes it look like the federal deficits were small and didn t increase much but it only looks that way because the red line is squashed down so much by the presence of the blue line i can fix that by removing the blue line graph 6 inflation adjusted federal deficits base year 1945 before 1960 and after the world war two adjustment the deficits are pretty well centered on the zero line during the 1960s the deficits are almost completely above the zero line during the 1970s the deficits are clearly above the zero line and noticeably higher than in the 1960s and during the 1980s the deficits are noticeably higher than in the 1970s the inflation adjusted federal debt is equal to the sum of these deficits would it be right do you think to say the u s was reasonably responsible with its finances before 1981 collecting sufficient revenues to pay for government services i don t see it myself i see a gradual and persistent increase in deficits since the 1950s whether this has anything to do with being responsible is not an economic question posted by the arthurian at 6 40 am 0 comments wednesday december 14 2016 principles of economic design rising is good but high is bad principles for the design of economic policy rising is good high is bad falling is only bad if debt is high repeat after me rising is good but high is bad rising is good but high is bad definitions for today s post good people are happy with the economy bad people are not happy with the economy posted by the arthurian at 4 00 am 0 comments tuesday december 13 2016 the intrinsic cost of money borrowing and lending are the same act engaged by two different actors the act itself puts credit to use the use of credit puts money into the economy just as surely as the open market operations of the fomc however when the fomc buys something the money it puts into the economy does not come with interest charges or repayment obligations to be paid by the recipient the money is unencumbered free and clear it is as if you sold your old car to your neighbor the cash you receive comes with no intrinsic costs by contrast when a borrower takes a loan not only money but also debt is created after a time the debt is extinguished by repayment this repayment also destroys the money that was created by taking the loan your lender puts money into the economy by lending to you and takes money out of the economy when you repay the loan the difference is that your bank lends money and the federal reserve spends money we see then that the money in the economy is of two kinds encumbered and unencumbered when i show the debt per dollar graph i am showing the relative proportions of these two kinds of money graph 1 total accumulated debt per dollar of the money we spend in 1966 when the rate of interest was about 5 our economy had about 7 debt for every dollar of circulating money each circulating dollar therefore over the course of the year carried an interest cost of about 35 cents in 2006 when the rate of interest was again about 5 our economy had about 24 debt for every dollar of circulating money each circulating dollar carried an interest cost of about 1 20 posted by the arthurian at 4 00 am 0 comments monday december 12 2016 you remember john nash right from ideal money and asymptotically ideal money pdf 8 pages a lecture by john f nash jr under the heading keynesians quoted for context the thinking of j m keynes was actually multi dimensional and consequently there are quite different varieties of persons at the present time who follow in one way or another some of the thinking of keynes and of course some of his thinking was scientifically accurate and thus not disputable for example an early book written by keynes was the mathematical text a treatise on probability the label keynesian is convenient but to be safe we should have a defined meaning for this as a party that can be criticized and contrasted with other parties so let us define keynesian to be descriptive of a school of thought that originated at the time of the devaluations of the pound and the dollar in the early 30 s of the 20th century...
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