Wednesday, August 11, 2010


The following is a periodic update on the economy. The honest assessment is hard times continue in the short term, with hopes for more growth by this time next year. Hopefully...

Links 8-11 below feature a "discussion" which appeared in The New York Times today and is worthy of your attention.

1. Market drop signals fears about global recovery. [The New York Times]
2. Fast-fading recovery now looks even weaker. [Reuters]
3. Thousands crowd housing authority for section 8 waiting list, fights break out (Text & Video). [The Huffington Post]
4. World equities slide as markets shun risk. [The Financial Times]

5. Debts rise, and go unpaid, as bust erodes home equity. [The New York Times]
6. U.S. two-year Treasury yield is near record low as investors seek safety. [Bloomberg]
7. Reagan insider: 'GOP destroyed U.S. economy'. [The Wall Street Journal]


Stocks declined sharply the day after the Fed announced that it would buy government debt to shore up the faltering economy. Weak job reports, along with other indicators, have caused Fed policy makers to worry increasingly about the economy falling into a deflationary spiral of declining demand, prices and wages.

How likely is the prospect of deflation now? Americans haven't experienced sustained deflation since the 1930s. Is there's something about the U.S. economy that makes deflation less of a threat? What's the way out? [All links below from The New York Times.]

8. Make inflation happen. [Tyler Cowen, professor of economics at George Mason University]
9. An overblown fear. [Simon Johnson, professor at the M.I.T. Sloan School of Management and a senior fellow at the Peterson Institute for International Economics.]
10. Politics may get in the way. [Mark Thoma, economics professor at the University of Oregon.]
11. Putting off purchases. [Heather Boushey, senior economist with the Center for American Progress.]
12. Deflation isn't likely. [Brad DeLong, professor of economics at University of California, Berkeley.]

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