The Most Important Text in Economics

This is the most important paragraph ever written in macroeconomics:

Make Economics Great Again

Economics is one of the most important academic disciplines. It produces knowledge about one of the fundamental components of a civilized society: 

1. the satisfaction of human needs,

2. by means of production and distribution of scarce resources, 

3. subject to fundamental uncertainty. 

Economists hold in their hands - whether they like it or not - the key to prosperity for all mankind. It is their (our) moral duty to explain to our policy makers, and to the general public, the difference between policies that elevate a society out of misery, and policies that hurl it back down again. 

Lessons from Venezuela, Part I

After a long period finalizing a book manuscript, I now have time to return to this blog. I developed this forum to discuss issues in the interface between economics and reality - a place where a surprising number of economists have never set their foot - and I have been yearning to get back to writing here again... 

Economics - and its less-recognized brother called "political economy" - can help us a great deal in making the world a better place. The problem is that most of modern economics is too quantitative to give people a chance to see its applicability. I want to use this blog to highlight the older, more useful side of economics. 

Ending Endless U.S. Budget Deficits

My latest peer-review article is published in Journal of Governance and Regulation, Vol. 5, Issue 4. Its title is: "Balancing the Budget: Can the Swiss Debt Brake End Endless U.S. Deficits?" Here is the abstract:

The United States is the world’s leading issuer of treasury bonds, and according to current forecasts there is no end in sight to annual budget deficits. Evidence strongly suggests that persistent deficits are closely associated with depressed growth, raising the possibility that a permanent end to U.S. deficits would permanently increase the country’s economic growth. However, with nearly a half-century long, almost unbroken line of deficits it is unlikely that Congress will rise to the occasion and end borrowing on its own. Suggesting that the United States needs budget-balancing regulations, possibly at the constitutional level, this paper explores two types of balanced-budget measures: deficit-elimination and debt-capping.

Click this link for the full article: 

http://virtusinterpress.org/BALANCING-THE-BUDGET-CAN-THE-SWISS.html

Trump Is Right on Obamacare Reform

After his convincing election win, President-Elect Trump has already begun talking about policy reforms. First on his agenda is Obamacare, which he wants to remove and replace with a more market-oriented model. This is promising; as I explained in 2007, and again in 2009, interstate competition on the health insurance market is a very good way to let market forces reduce the cost of health insurance while increasing quality and choice for insurance buyers.