Monetary Step Backward?

The New York Times has a good article about people in Utah pushing the state to adopt a law that would make it easier for people to buy things with gold and silver coins (based on the value of their weight). This is a Tea Party idea and it seems as if they want to push the idea of allowing states to coin their own money. There are a lot of ways to attack this, but it should be sufficient to say that the idea is a big step backwards and shows just how out of touch the Tea Partiers are with basic economics.

Christina Romer and the Strong Dollar

Christina Romer has a good piece in the New York Times Economic View column about the economics and politics of the dollar - basically, is a strong dollar a good thing? She does a good job explaining how currency markets set the value of the dollar and why having a strong dollar is more of a political issue than an economic concern. This is definitely a good article for students when discussing exchange rates.

Inflation on PBS Newshour

Paul Solman has a good piece on how inflation is measured and what inflation means in this video clip from the PBS Newshour.

Watch the full episode. See more PBS NewsHour.

Total Tax Burden Around the World

The Economist has a good chart comparing total taxation on wage income in different countries around the world. The chart not only has comparable taxes, but bases the taxes on average income in each country.

Four Workers for Every Job

Catherine Rampell covers this in the New York Times Economix blog. The improving job numbers makes everyone think that we are out of the woods in terms of the economy. How far we have to go to get back to normal is still a big number. An indication of this is the number of jobless workers for every employment vacancy (this does not get into whether or not the jobless workers are appropriately skilled for the vacant jobs). The new, and improved number is: four jobless workers for each opening - still not good odds. This graph show this and puts it into historic relevance.

Mankiw's Three Big Questions

Greg Mankiw in the New York Times Economic View column posts the three big questions that are currently perplexing him. They are:

1. How long will it take for the economy's wounds to heal?

2. How long will inflation expectations remain anchored?

3. How long will the bond market trust the United States?

These are good questions, and Mankiw's explanation of why the answers matter are good. If students can understand that these are the important questions to ask, they have learned a lot.

Role of Economics?

Edward Glaeser made his last post to the New York Times Economix blog today and it is worth the read. Glaeser's post explains his view of the purpose and limits of economics in an imperfect world - and what economists can add to the public debate on issues. It is a good short read into the philosophy of economics.

Dani Rodrik's Parable of Trade

Dani Rodrik posted his parable of trade and an explanation on his web page - it is a short and simple reading that shows the benefits (and social costs) of trade. This will be on my reading list from here on.

Deficit Debate - Krugman vs. Holtz-Eakin

The PBS News Hour has a good debate about the deficit and debt debate between Paul Krugman and Douglas Holtz-Eakin.

Watch the full episode. See more PBS NewsHour.

Why Can't Economists Agree on Deficit?

Mark Thoma has a good article in Fiscal Times about the reasons why economist disagree over the Federal deficit. As Thoma points out, and explains, the divide between economists is based on the classical-Keynes split.

Ryan and Obama Plans Side by Side

The New York Times has a good chart that lays out the differences between the Ryan and the Obama deficit reduction plans. Let the debate begin.

Debt Ceiling Video

Paul Solomon on the PBS News Hour has a good video about the issues involves in the debt ceiling debate, its effect on the economy and how it is viewed on Wall Street. It is very informative and good for teaching the concept.

Watch the full episode. See more PBS NewsHour.

Structural vs Cyclical Unemployment Debate

Christina Romer has a good column in the New York Times on the current debate over the rise in the natural rate of unemployment and whether the current unemployment problem is cyclical or structural. Romer does a good job showing that most of the current unemployment problem is the result of cyclical issues and not structural (mismatch of job creation to the skills of the unemployed or a "housing lock" of people tied to underwater mortgages). However, she also makes the case for why the government should be concerned with increases in structural unemployment.

Debate over the Debt Ceiling

Now that the current budget debate is over, the next debate will be over raising the debt ceiling. This debate will be coming to its :do or die" time over the next five weeks. This debate is more important. The temporary shutdown of the Federal government would have been not good, but the failure to raise the debt will be a big bad that could have wide ranging consequences for the U.S. and world economies. So, as this debate gets going, it is time to look at the current composition of the debt. The New York Times published this graphic showing the history of rising the debt ceiling and the composition of the current debt. Three points to look at on this. First, look at the amount owed to Social Security. Second, the amount added to the debt by the Obama stimulus plan. Third, the amount added by the various programs of George W. Bush. Interesting that only now the Republicans are worried about the debt - so much so that they will threaten the creditability of the U.S. on world financial markets.

The Civil War and the Great Monetary Experiment

The blog Macro and Other Musings has a good post on the three monetary systems the United States used during the Civil War (Green bank fiat currency in the North, State backed fiat currency in the South and Gold back currency in California). The comparisons between the systems and effects on the war are interesting. Because, the value of Confederate money depended on the war situation, it value fluctuated during the war. The graph below show this: