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scandalousmuffin:

How hyperinflation really happens.

Yeah, we are so not Syria.

Originally posted on The Dish:

Matthew O’Brien highlights Syria’s hyperinflation:

It turns out you can’t have much of an economy when your country is a war zone, and the regime is attacking civilians. But functioning economy or not, the government still has to pay its bills. So what does it do when there’s nothing to run or tax? Easy: It prints what it needs. That’s what the pariah Assad regime has done to cover the difference between what it has to pay, and what its few remaining patrons have paid it. The predictable result of all this new money chasing fewer goods has been massive inflation.

This is in keeping with the history of hyperinflation:

Hyperinflations tend to happen following wars or revolutions. Now, Weimar Germany and Zimbabwe look like exceptions to this rule, but they’re not really – the former’s resistance to reparations, and the latter’s botched land reform halted economic activity as much as any conflict.

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Categories: Economics Tags: economics, Inflation

Detroit circa 1973.

Matt Yglesias at Slate breaks down the (less) big city’s bankruptcy:

The basic reason Detroit needs to do this is pretty simple. In 1950 there were 1.85 million people in Detroit. In 1970, it was 1.5 million. In 1990, it was a million flat. By 2010, it was down to 710,000. When your city is shrinking like that, you end up with a tax base that’s inadequate to maintain the fixed infrastructure or to pay off pension costs that were incurred in more prosperous times.

Governing.com has an interactive map in the link showing all municipalities that filed for Chapter 9 bankruptcy protection since 2010, along with local governments that voted to approve a bankruptcy filing:   http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html

WaPo reports the progress on the bankruptcy filings:

The filing begins a one- to three-month process to determine whether the city is eligible for Chapter 9 protection and who may compete for the limited settlement money that Detroit has to offer. But it could be years before the city emerges from bankruptcy.

Also from WaPo, the impact on Detroit’s citizens:

Who gets hurt most?

Detroit is about $18 billion in debt, and will only be able to pay out a fraction of that in the short term. The two main groups of creditors arguing they’re entitled to that money are public employees and retirees, and bond holders. The investors are likely to make out better, since more of that debt is secured; the city will continue to pay water and sewer bondholders. Most of the pension debt has no similar backstop.

City residents will likely suffer a lack of anything other than the most rudimentary public services for a long time, but the impact is likely to be felt most keenly by those who lost a large chunk of the retirement they were counting on.

Tl;dr The cultural relevance and economic output of Detroit are both underwater and will continue to die. None of the journalists have the balls to say so, but I bet some of them are thinking, “Maybe we should let it die.”

Categories: Economics, News Tags: bankruptcy, chapter 9, debt, detroit, economics, matt yglesias, Michigan, Richard Snyder

Josh Barro is the only conservative columnist who has been able to give me pause and keep me engaged and thinking on Twitter. All my favorite libertarian columnists happen to be gay (Greenwald). Not sure what’s up with that.

@jbarro

Politics Editor at Business Insider. Crotchety young man. [email protected]

Via Wikipedia:

Joshua A. Barro is an American opinion journalist and the current politics editor at Business Insider… He has a bachelor’s degree in psychology from Harvard.

Time named Barro’s Twitter feed one of “The 140 Best Twitter Feeds of 2013”, one of ten in the Politics category. In 2012, Forbes selected him as one of the “30 Under 30” media “brightest stars under the age of 30,” and David Brooks listed him as part of the, “vibrant and increasingly influential center-right conversation.”

Barro describes himself as a neoliberal and a Republican, but has expressed opposition to many policies of the Republican party. He has been described by others as conservative, liberal and libertarian.

Barro lives in Queens, NY. His father is noted macroeconomist Robert Barro. Barro is openly gay and has written in support of gay marriage.

Categories: Economics, Politics or: the art of looking for trouble Tags: Business Insider, conservative, economics, Josh Barro, Joshua Barro, journalism, journalist, liberal, politics

September 2012 unemployment according to the BLS:  7.8%

Nate Silver comments:

The jobs numbers are certainly not enough to change the basic story of a slow economic recovery, and it will take many years for the economy to get back to full employment.

However, the jobs numbers are one of the more hopeful signs for the economy on balance. An average of 146,000 jobs have been created per month over the past year, or closer to 157,000 with the government’s anticipated benchmark revisions accounted for.

Those aren’t great numbers by any means, and would translate to an annualized growth rate of 1.4 percent. But over the past 25 years, payroll jobs have grown at an annualized rate of 1.1 percent, or the equivalent of about 125,000 jobs added per month given today’s population. By this measure, it’s been a fairly average economic year, although certainly not enough to make up for the productivity that was lost from the economy in 2008 and 2009.

Categories: Economics Tags: 2012, 538, fivethirtyeight, Jobs, Nate Silver, obama, unemployment, unemployment rate

Paul Krugman discusses the “dependent upon government” citizens that Romney refers to in the now viral Mother Jones video inside a private donor meeting:

Actually, if you look at the facts, you learn that the great bulk of those who pay no income tax pay other taxes; also, many of the people in the no-income-tax category are (a) elderly (b) students or (c) having a bad year, having lost a job — that is, they’re people who have paid income taxes in the past and/or will pay income taxes in the future.

↓By the way, I don’t control WordAds content, so I’m sorry if you get finance investment firm ads.

Categories: Economics, Politics or: the art of looking for trouble Tags: 47%, economics, election 2012, gop, Mitt Romney, mother jones, Paul Krugman, politics, taxes

Via Ezra Klein’s Wonkblog:

Today, the Bureau of Labor Statistics released the latest Consumer Product Index (CPI) numbers, giving the most recent estimate of the rate of inflation. The short version: There isn’t any. The inflation rate for all products grew by a whopping 0.0 percent. When you exclude food and energy prices, as economists frequently do to get the “core” rate of inflation, inflation in July was just 0.1 percent. Indeed, inflation for the past 12 months was only 1.4 percent, well below the Federal Reserve’s target of 2 percent, and core inflation was only 2.1 percent.

My first post that ever got significant attention on the internet was “Fact Checking The National Inflation Association And its Hyperinflation Fear-Mongering.”

I actually wrote it as a response to the NIA video that I originally saw on my former boss’s Facebook wall. In hindsight, it’s probably not a good idea to post sarcastic blog posts on your former boss’s Facebook wall.

My style is more analysis-oriented than sarcasm-based these days, which is more boring, but more along the lines of the stuff I like to read. Hey, I was still right after two years. And Peter Schiff is still crazy.

Categories: Economics Tags: core inflation, economics, Ezra Klein, fiscal policy, Inflation, monetary policy, wonkblog

OK, I was wrong. Chief Justice Roberts swung to the left and Kennedy did not. Amazing. I’ll have to scrutinize Roberts’s voting record more closely before passing him off as ideologically pure. Here’s the full ruling if you have a lot of free time. He actually upheld the mandate under the federal government’s Tax Power and not the Commerce Clause, while Ginsberg would have upheld it under both. Interesting, certainly a blow to conservatives.

Being uninsured myself, I have mixed opinions about the 2014 individual mandate, but what is known from models like Mass. is that it will reduce overall health care spending and create more competitive private insurance plans.

For a while this morning, Cable News was reporting that the mandate was struck down before they got “conflicting information.”

This is what happens when they don’t let in cameras.

What the Medicaid part of the ruling means according to SCOTUSblog:

The Court’s decision on the constitutionality of the Medicaid expansion is divided and complicated. The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.

Senator Harry Reid ‏@SenatorReid

Now that this matter is settled, I hope we can work together to create jobs and secure this country’s economic future

Categories: Economics, Politics or: the art of looking for trouble Tags: ACA, health care bill, individual mandate, Justice Kennedy, Justice Roberts, medicaid, obamacare, SCOTUS, supreme court