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Marshall Auerback
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Entries by Marshall Auerback

Balanced Budget Amendment Follies

(8) Comments | Posted October 12, 2011 | 2:30 PM

This post was co-authored by Marshall Auerback and Micah Hauptman.

"Balance the budget!" It's the endlessly repeated narrative heard in Washington. Implicit in this narrative is that budget deficits are crippling our economy and the U.S. government is on the verge of insolvency. If we only imposed strict fiscal...

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Fiscal Policy for the People? Why Obama Should Invoke the 14th Amendment

(225) Comments | Posted July 6, 2011 | 3:23 PM

In response to the debt ceiling drama, serious people are now talking about the President's ability to use the 14th Amendment to declare the debt limit unconstitutional. That's a welcome development in a debate too often characterized by wrong-headed economics and outright demagoguery. If Obama seizes the moment, we could...

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The Myth That Banks Are Solvent

(127) Comments | Posted May 12, 2011 | 5:25 PM

Cross-posted from New Deal 2.0.

Banks will likely have too much cash by 2019 as a result of the Basel III global banking rules, UBS AG Chief Executive Oswald Grübel said Thursday. "In the next 10 years, at the end of 2019, we will have overly...

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Revenue Sharing for the States: How It Works, Why We Need It, and Why Nixon Liked It

(58) Comments | Posted May 11, 2011 | 3:20 PM

Cross-posted from New Deal 2.0.

Our policymakers continue to believe that they must first 'get credit flowing again' to restore output and employment. Unfortunately the reverse is the case: restoring output and employment will restore the flow of credit. Creditworthiness precedes credit.

And yet, as we get closer...

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We Aren't Greece -- But We Could Be Japan if Flawed Logic Persists

(8) Comments | Posted March 28, 2011 | 10:14 AM

Influential journalists are making persuasive cases that austerity is the wrong approach in fragile economies. That's good news. But discussions still get muddled in ways that can have perverse effects.

Take the case of Japan. Last week Bill Mitchell wrote an excellent blog post discussing Martin Wolf's

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What Does the Earthquake Mean to Japan's Fiscal Future?

(2) Comments | Posted March 14, 2011 | 12:17 PM

There is no doubt that this terrible earthquake is worse than the Kobe tragedy of 1995. Kobe was a 7.4 on the Richter scale, but the quake that hit Sendai was 8.9 -- many hundreds of times more powerful. And then there was the tsunami. The devastation is...

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Obama's Half Measures Won't Save the States

(0) Comments | Posted February 9, 2011 | 8:25 AM

The New York Times reports that President Obama has proposed aid for state unemployment insurance programs burdened by debt because of high unemployment rates. At the margin, no complaints here about the idea. But it's fairly limited in scope and may not make that much of a difference.

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Plan B for Health Care Reform: It's Called 'Medicare for All'

(4) Comments | Posted February 2, 2011 | 9:41 AM

My colleague, Bo Cutter, has noted the likelihood of continued challenges to health care reform in the wake of the recent Florida State Supreme Court decision to invalidate the entire health care bill. Frankly, the legal attacks on the bill, even if driven by highly suspect and selfish...

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SOTU: The Dollar Gap Between Rhetoric and Reality

(8) Comments | Posted January 26, 2011 | 10:42 AM

In his State of the Union address Obama offered a corporate tax cut, a retooling of the tax code and an end to pet spending projects. All good. The tax code has long been used as a political plaything by Washington's mounting corps of lobbyists and special interests,...

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Lesson From Europe: Fiscal Austerity Kills Economies

(60) Comments | Posted January 25, 2011 | 11:33 AM

There's more evidence that fiscal austerity should never be a government policy objective. The UK has just released its 4th quarter GDP numbers and the results are predictably grim: a -0.5% decline in GDP for the last three months of 2010, versus a market expectation of +0.4%.


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Drinking Austerity Kool-Aid in 2011

(78) Comments | Posted January 4, 2011 | 9:49 AM

The beginning of the year always seems a good time to lay out some broader themes which could develop throughout the year, good and bad, so here goes:

The good news is that the US budget deficit still looks to be large enough to support modest top line growth and...

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Reality Check: Why Truth Will Protect Social Security

(152) Comments | Posted December 20, 2010 | 9:39 AM

It is clear from the comments on our last piece that we might have raised more questions than we answered. Above all, we want to make clear that when we discuss the funding aspects of the Social Security program, we are doing so in a way that is...

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Cut the Payroll Tax to Save Social Security

(140) Comments | Posted December 16, 2010 | 12:32 PM

One of the highlights of the president's compromise on the tax bill is a temporary payroll tax "holiday" -- something we have long advocated for along with others such as James K. Galbraith and Warren Mosler. The proposed deal would cut the tax by two percentage points from...

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Germany Faces a Messy Break-up With the Euro

(10) Comments | Posted December 6, 2010 | 11:16 AM

Like marriage, membership in the euro zone is supposed to be a lifetime commitment, "for better or for worse." But as we know, divorces do occur, even if the marriage was entered into with the best of intentions. And the recent turmoil in Europe has given rise to the idea...

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Bankers Gone Wild in Ireland and Germany

(25) Comments | Posted November 29, 2010 | 10:30 AM

Much ink has been spilled in the press over the Irish problem and the laxity of the country's southern Mediterranean counterparts in contrast to the highly "disciplined" Germans. But perhaps we have to revisit that caricature. Not only has the Irish crisis blown apart the myth of the virtues of...

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The G20 Currency Accord Collapses Under the Weight of Its Own Contradictions

(6) Comments | Posted October 26, 2010 | 10:12 AM

Cross-posted from New Deal 2.0.

Treasury Secretary Tim Geithner appeared fixated on US trade at last weekend's G20 Summit in South Korea. While it is misguided to focus solely on current account imbalances, there is a certain kind of perverse logic behind his thinking. Given that...

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Main Street Is Dying a Death by a Thousand Spending Cuts

(19) Comments | Posted October 5, 2010 | 1:59 PM

According to the in an article entitled "Savers told to stop moaning and start spending," Charles Bean, deputy governor of the Bank of England, said, "Savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may...

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Does a Weaker Currency Equal Default? Not in the Real World

(17) Comments | Posted September 30, 2010 | 10:09 AM

Here we go again: the dollar appears to be under sustained attack in the foreign exchange market. To judge from its latest FOMC statement, the Federal Reserve appears to be actively encouraging inflation: "The Committee will continue to monitor the economic outlook and financial developments and is prepared...

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Deficit Drivel: Hillary Singing Same Wrong Tune As Obama

(41) Comments | Posted September 13, 2010 | 11:01 AM

I'm not a big fan of Dick Morris, but he does know his Clintons. In his most recent blog posted last week, he posits the idea that Hillary is beginning to position herself for a challenge to President Obama, based on some recent statements she made on our...

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One Small Step for Recovery, One Giant Leap Still Needed

(11) Comments | Posted September 8, 2010 | 11:03 AM

Electoral disaster has a way of focusing the mind. Perhaps this is the best way to explain President Obama's latest initiatives: an investment in the nation's roads, railways and runways that would cost at least $50 billion, along with a permanent extension of the research and...

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