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googledocs file mine brings up a preview window click the use this template button to open it introductory post google translate blog archive 2018 31 january 31 2017 274 december 31 november 26 october 21 september 23 august 27 july 21 june 17 may 21 april 13 march 25 february 25 january 24 2016 318 december 26 november 20 october 30 september 27 august 29 july 17 june 30 may 24 april 30 march 30 february 30 january 25 2015 283 december 7 november 11 october 21 september 23 august 26 july 27 june 26 may 30 april 25 march 28 february 27 january 32 2014 374 december 25 november 25 october 26 september 30 august 34 july 35 june 32 may 34 april 33 march 35 february 28 january 37 2013 412 december 33 november 31 october 35 september 32 august 33 july 36 june 31 catfish makes me want to scream a remarkable coincidence of boost and drag economic forces a sketch how to get credit costs down ballparking the cost of credit http fredqa stlouisfed org 2011 10 06 the market millions of millions a simple question krugman i believe in the debt overhang story eno being fair and balanced the same nightmare over and over what s up what does it matter anyway inequality and something else rules for the direction of the mind if i have this wrong tell me if i have it right simpler the components of base money i still don t trust the son of a bitch other checkable deposits not just a difference of opinion reading the electronic blips in search of better questions but saving is its own reward superior growth and the ratio of non federal debt reprise debt and potential gdp totsie and caput no exit the 78 ed lambert s ut graph the difference between debt and credit may 36 april 39 march 40 february 31 january 35 2012 476 december 38 november 35 october 51 september 41 august 35 july 39 june 37 may 31 april 38 march 36 february 44 january 51 2011 571 december 44 november 38 october 41 september 53 august 54 july 52 june 50 may 45 april 54 march 46 february 37 january 57 2010 361 december 51 november 43 october 47 september 43 august 35 july 39 june 31 may 9 april 8 march 12 february 23 january 20 2009 79 december 17 november 10 october 14 september 20 august 3 july 7 june 4 april 1 march 1 february 1 january 1 links the 12 pages pdf html scribd money as credit paul krugman john mason gavin kennedy crisis timeline 1 crisis timeline 2 statistical abstracts measuringworth bea economic accounts bls inflation jobs flow of funds debt st louis fed fred money stock 1947 58 economagic usgovernmentspending top tax rates recession dates corp taxes 2006 irs tax data pk sources historicalstatistics org historical charts perot charts mark wieczorek the secret economist econompic john williams sgs crystal bull aquinum s razor flavianopolis william f hummell ecometry the l curve businomics blog on banking crises cybereconomics tim duy like a father to me worthwhile canadian the skeptical optimist nextblog better of thought action the troublesome economist the candid blogger blended purple frozen arctic tundra truth addicts anon jbpeebles mayday books dredd blog dolor s rants the 40 year old freshman thinking on the margin redonomics broad oak unsettling economics irrational expectations theory2life prac spoiler tips vin s read more faq s image host a very nice menu www w3 schools bloogger help image test and t2 blogger sentral html color codes google translate link within a page supreme court jester dave ross 1 dave ross 2 organize your stuff interesting jim kardi teknomo numerical ignorance mental workout g scaled data g normalized data tufte data analysis arthurian website about me contact labels real is a calculation 1 2 3 4 5 6 7 1966 1970s growth 1986 2000 2013 revision 400k smoothing a call for better argument a little r n r accelerated repayment of debt accidental discoveries adjusting debt for inflation artish b is greater than a b h finte behavioral ec best put downs bullard s earthquake c d of wealth calculating labor share civ civilization coinage coping cost and productivity cost push cost push inflation credit efficiency crisis chronicles cycle of civilization debasement debt debt and context debt and inflation debt and recovery debt bulge debt good and bad debt is not credit debt productivity debt to gdp debt to gdp in comments def credit def debt def economic activity def financial cost def gdp def general equilibrium def inflation def inside money def investment def issue and reissue def laffer limit def outside money deflation demand pull inflation disarray dpd echoes economic forces economics v the economy eroc erosion of debt evolution of the excuse expectations factors failure s embrace fallacy of composition fcm fed policy federal spending feedback loops final spending financial cost financialization five words five digit years forget about debt fpi fred free banking era full disclosure fun with the mpc gang8 gds gold shortage gresham s law gross domestic spending growth rate calc growth phase growth historical revisionism hoarding hodrick prescott household debt hover craft how to pay for it humor because you might not know if i didn t say i couldn t sleep iceberg inflation introduction is it ego captain jerry says krugman laffer curve limits long and variable loops malaise matched set fekete math problems medium of account military spending milton friedman mmt money multiplier more debt than money is policy motives moving average new tools of policy non linear not only household debt oil parameters for debt pfi policy predicting recession price controls printing vs spending problem x productivity questions r reading and writing red and green reduction reviews scott sumner sequence 2 serfdom simulacron simulated evidence slack special report spreadsheeting stagflation standard deviation star trek stimulus sumner symmetry in deception taxes taylor rule the difference between debt and credit the economy is transaction the k r shift the long decline the supply side the tint knob they don t know timeline tongue in cheek tot ulc umic unsustainable urgency verdoorn waste fraud abuse withering shoots zoho the new arthurian economics copyright 2010 2018 arthur shipman sunday june 30 2013 catfish makes me want to scream felix salmon has a fantastic blog post on the subject of america s gdp growth and the potential thereof he s talking about this chart salmon graph 1 ngdp blue and potential ngdp green salmon points to the bifurcation where gdp falls away from potential he agrees with greg ip that the green line might well overstated that the economy can t in fact grow sustainably at the kind of pace that the cbo is assuming it can this view reminds me of jim bullard s earthquake story salmon offers an explanation why the economy cannot grow at that higher rate he shows a second graph salmon graph 2 total debt red added to graph 1 he points out in words that total debt has grown far faster and far higher and far more than gdp and he presents his explanation in other words in order to keep up a steady rate of gdp growth we had to saddle ourselves with ever more cheap and dangerous debt then suddenly the growth of the credit markets screeched to a halt and we had a major recession and since then the size of the credit market has been roughly flat it makes sense that if we needed ever increasing amounts of debt to keep up that long term gdp growth rate then when the growth of the debt market stops our potential growth rate might fall significantly now you might think i d be happy to see felix salmon considering total debt as the problem underlying our economy s inability to find vigor i am but i want him to get it right i think he has it wrong and he makes me want to scream first of all salmon s view is that for gdp to keep growing on the path established by potential gdp total debt has to keep rising like the red line was rising before the great recession but that is only true if we insist on using credit for growth or really for everything and that is a plan which cannot succeed we learned that the hard way the concept that underlies the design of policy the concept that credit use is good for growth is terribly terribly flawed it leads to unsustainable policy as salmon puts it the bubble had to burst at some point second it is not the failure of debt to increase that hinders growth it is the success of debt the excessive cost of excessive debt is the problem salmon himself reports that the ratio of debt to gdp increased from 1 6 to 1 in 1970 to 2 8 to 1 in 2000 to 3 7 to 1 by mid 2008 all of that happened before the crisis all the while real gdp growth was in decline salmon says economic growth dropped below potential because debt growth tanked in the great recession but in fact economic growth had been in decline pulling potential gdp down with it for decades because rising financial costs undermined demand and eroded profits salmon says the problem is five years old i say it s more like five decades salmon explains the problem this way suddenly the growth of the credit markets screeched to a halt i explain it this way rising financial costs undermined demand and eroded profits do you see how different his analysis is from mine for felix salmon the problem seems to come suddenly because he overlooks the long gestation incorrect analysis leads to incorrect conclusions here are salmon s conclusions i m glad that we ve finally put an end to the credit bubble which had to burst at some point but it s naive to think that we can do so without any adverse effects on broad economic activity so we might indeed have to resign ourselves to lower potential growth going fowards if only because we re taking ourselves off the artificial stimulant of ever accelerating credit like bullard salmon is prepared to resign himself to lower potential growth going forward salmon thinks we can only get the growth if debt grows faster salmon s reasoning is fundamentally tied to the notion that we need credit for growth but that notion is fundamentally horribly wrong related post felix salmon we fervently hope for more lending link to excel spreadsheet with fred data my rgdp growth graph posted by the arthurian at 4 00 am 1 comments saturday june 29 2013 a remarkable coincidence of boost and drag modified from clker com the new uses of credit provide economic boost while the cost of existing debt is a drag on growth this duality is what eventually makes credit use ineffective as ever larger new uses of credit are required just to offset the drag created by the debt from prior credit use mine of 6 april 2012 if you use credit to boost the economy you must use enough to fully offset the drag created by existing debt and more besides to realize a boost but each new use of credit enlarges existing debt so new uses of credit must always grow larger the total cost of interest is a measure of the drag created by existing debt we looked at it the other day here s my estimate again of interest paid on all debt in the us graph 1 estimated total interest paid billions of dollars having an idea of the total cost of interest gives us a feel for the economic drag created by existing debt i want to compare that drag to the economic boost we get from new uses of credit in graph 3 of the 26th i showed all the debt i know about the change in debt from one year to the next is a measure of new credit use recorded as an addition to existing debt so we can use change from year ago of total debt as a measure of new credit use and compare those values to the cost of debt as measured by interest paid graph 2 the cost of debt blue and new uses of credit red a remarkable coincidence it s a horse race from the early 1950s to the late 1990s or maybe it s no coincidence at all when new uses of credit red are more than the cost of existing debt blue we can say credit use boosts the economy such moments are clearly visible before the 1974 recession before the 1980 recession after the 1982 recession and since the late 1990s before the 1990s it was generally true that when new use of credit ran above the cost of interest the economy experienced growth and when new use of credit dropped coming close to the cost of interest the economy experienced recession this is exactly as i describe in the opening remarks of this post more recently the economy seems not to behave according to this rule specifically in the years sometimes described as a macroeconomic miracle the latter 1990s new credit use red runs below the cost of interest and then in the 2000s new credit use shows a massive spike yet economic performance was pitiful it seems that since the 1990s some other complication has been inhibiting growth posted by the arthurian at 4 00 am 0 comments friday june 28 2013 economic forces a sketch some people may say that when you make a payment on your debt the guy who receives the money spends it so that paying down debt is not really a drag on the economy but of course it is a drag on the economy for paying down debt is the equal and opposite of taking out a loan and taking out a loan typically helps boost the economy the opposite of taking out a loan is paying it down and the opposite of boosting the economy is slowing it down so of course paying down debt is a drag on the economy it has to be posted by the arthurian at 5 00 am 2 comments thursday june 27 2013 how to get credit costs down it was only an estimate yesterday s post i don t know the exact numbers but you get the idea the cost of credit is a big number and when we are making payments on debt we can t use that money to buy other things we want that s a drag in more ways than one so maybe we want to get the cost of credit down the cost of accumulated debt get it down i m for that how could we do it well what does the cost of credit depend on the cost of credit depends on how much debt there is and the interest rate on all that debt to reduce the cost of credit we can reduce how much debt there is or we can reduce interest rates one or the other or both of these things must be done if we want to reduce the cost of credit in our economy but you know interest rates are already as low as they can go rates have been falling since 1981 and now they are at the zero lower bound we can t really lower interest rates more and that means we can t reduce the cost of credit by lowering interest rates so what s left the only choice left is to reduce how much debt there is it s simple when you get right down to it posted by the arthurian at 4 00 am 5 comments wednesday june 26 2013 ballparking the cost of credit economic forecasts and statistics are often based on guesstimates wikipedia i had reason recently to read again steve randy waldman s persnickety followups on inequality and demand i should probably read the cynamon fazzari paper he links but i got distracted by a shiny object at the end of his post this shiny object setting aside everything that interests srw and his readers all i want to know at the moment is how the effective federal debt interest rat...
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