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Blog: American Enterprise Institute – AEI
Herb Stein famously said that if something cannot go on forever, it will stop. That the path of our public finances will end in tears is beyond question. The only real questions are how our budget policy recklessness will end and when it will end.
The post Our Ticking Public Debt Time Bomb appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
Something all too reminiscent of Greece in the run up to its 2010 sovereign debt crisis is now occurring with Italy. Today, markets appear to be falling over themselves to buy Italian government bonds, even though that country's sovereign debt is on an unsustainable path.
The post Echoes of Greece in Italy appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
Unfortunately for Biden, the Fed's transparency makes it immune to pressure to reduce interest rates. Any effort to pressure the Fed to cut rates would likely invite the bond vigilantes to send long-term interest rates significantly higher for fears of a loss of inflation control.
The post The Fed Is Raining on President Biden's Economic Parade appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
James Carville, Bill Clinton's political advisor famously said that when it came to elections it was the economy, stupid. This year's presidential election is likely to prove no exception. Six months before that election, a constellation of economic risks is building at home and abroad.
The post It's the Economy, Stupid appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
There is good reason to be disappointed with Jerome Powell's Federal Reserve. It has gotten us into an awful economic mess as a result of its earlier ultra-easy monetary policy. That policy managed to create both an inflation and a financial stability problem.
The post The Federal Reserve Must Choose Its Poison appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
In early 2008, on the eve of the US housing market and sub-prime lending crisis, markets were also buoyant. Many clues are pointing to another episode of excessive market optimism.
The post The Stock Market Is Partying like It Is 2008 appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
If ever a country needed an IMF economic program to stabilize its economy, it has to be Recep Erdogan's Turkey. It is that years of Erdogan's erratic economic policy management has considerably undermined both domestic and international economic confidence.
The post It Is Time for the IMF in Turkey appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
At a time when all indications are that China is well on its way to a Japanese-style lost economic decade, Chinese policymakers cling to the illusion that their country's economy can continue to grow at 5 percent a year.
The post On the Road to a Lost Chinese Economic Decade appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
Our public finances are on a dangerously unsustainable path. One indication of our budget problems is that at a time of cyclical economic strength, when the government's budget should at least be in balance if not in surplus, the deficit is around six percent of GDP.
The post The Winding Road to a Public Debt Crisis appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
Even as another US banking crisis now looms and China increasingly poses a deflationary threat to the world economic outlook, Mr. Powell stubbornly clings to the view that interest rates need to remain high for longer to regain inflation control.
The post Jerome Powell Is Inviting a Banking Crisis appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
We have to hope that Jerome Powell's Fed has learned from that experience. Maybe then it will not make the mistake of keeping interest rates too high for too long and thereby avoid an unnecessary hard economic landing.
The post The Regional Bank Crisis Is Not Over appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
For Argentina's sake, we must all hope that Milei will succeed where all too many of his predecessors have failed. We must do so even if that might mean allowing our hope to triumph over experience
The post Will This Time Be Different for Argentina? appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
Over the past year, the S&P 500 has rallied by almost 20 percent despite very troubling underlying economic and political fundamentals. In the year ahead, the key question for investors is whether the markets will choose to continue ignoring those fundamentals.
The post Will Markets Stay Irrational in 2024? appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
There would never be a good time for the global economy to be subjected to a spike in international oil prices. However, today would seem to be a particularly inopportune time for such a spike.
The post Oil's Long Shadow over the Global Economy appeared first on American Enterprise Institute - AEI.
Blog: American Enterprise Institute – AEI
In recent days, the markets have refocused attention on Italy's shaky public finances and sent the Italian-German government bond spread to its highest level since the start of the year. The Italian government should change economic course soon if it wants to avoid a full-blown debt crisis next year.
The post Unpleasant Italian Debt Arithmetic appeared first on American Enterprise Institute - AEI.