Scott Sumner has Another Post Debating the Efficacy of Fiscal Stimulus

Scott Sumner has Another Post Debating the Efficacy of Fiscal Stimulus.

To me it is a moot point because even if it works even taking the advocates numbers the cost is way too high per job saved/created. It is clearly better to use monetary stimulus combined with a wage subsidy. 

This seems especially true in the current downturn because the lower skilled workers are so much more likely to be out of work. For the people at the bottom of skill levels a wage subsidy is a much cheaper way to create jobs than a stimulus which is likely to have quite a bit of crowding out.  Even Allen Blinder an advocate of the first stimulus has said as much.  


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High School Should not Just Prepare Adolescents for College

Edububble excerpts:

High school, in short, should not just prepare adolescents for college and careers, but for successful lives as adults. And far from backing off modern notions of success, this approach actually embodies new understandings of what really helps people succeed: not just reading and math, but deeper life skills that aren’t reflected on exit exams or college applications.

I have been saying something like that for years.
Why is it that people complain endlessly about US children not do well on PISA and similar test but we seldom talk about what knowledge or skills would help them live better lives and what are the most efficient ways to get that knowledge and those skills to people.

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If the OWS People were Serious People

If the OWS protesters were serious people the would carry signs that say things like:


One percent per year expense on a mutual funds is over 20% of the expected real gain! And you do not even beat the indexes!  And you must have paid of congress because 401ks legally require us to use mutual funds!


Or


We know from Benford's Law that you are scamming us.


Or

Goldman Sachs runs the US Treasury, is it any surprise that it biased in their favor?

Or

The Federal Reserve system cannot function well in a sharp contraction.  We need free banking.


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Tyler Cowen Outlines a Way to Solve Italy's Debt Problems

Tyler Cowne on a way to solve Italy's debt problems.  Tyler suggests that a wealth tax would work.

My comments:  

Unlike the Germans, Italians do not obey laws just because they are laws democratically enacted.  This has good and bad effects.  One result is that makes it difficult to collect any  tax, let alone a wealth tax.   So I think that Italy may have to default in some way.  

But Italians should not disrepair.  The biggest negative result from a partial default would be that it would make it difficult for the Italian government to borrow, but IMHO the benefits of being able to borrow are overrated.

To me the 2 benefits of borrowing are:

1. To move some of your consumption earlier in you life when it is more enjoyable. 
2. It enables businesses with good ideas to grow faster. 

A balanced budget amendment results in the same thing a government that cannot borrow.  Also borrowing is not a great idea if you like Italy have rapidly falling population. 

If I was an Italian citizen (or Greek) I would vote for default. I would say the government is debt not me.