Not a day passes without pundits, journalists, treasury officials, and politicians exaggerating the dangers of a growing public debt, writes Eric Tymoigne. To him, the rhetoric is hysterical. Here are examples he cites: The US government is going broke; China will soon own the United States; the growth of the public debt is unsustainable; you or your descendants will have to pay that debt; ballooning interest payments on the public debt constrain our ability to pay for government programs; Social Security and Medicare are going bankrupt so the government should save and put the money in a locked box. But this hysteria has led to inaction, or inadequate responses, to the problem of our times. While America’s current levels are now a consequences of extreme tax cuts for the rich, policy conservatives argue that it is social programs that are the cause. I remember one such biased host on CNBC making this claim.
In the summer of 2017 the Trump government imposed sanctions on Venezuela ostensibly to pressure the government to change. But Mark Weisbrot and Jeffrey Sachs conclude that that most of the impact of these sanctions has not been on the government officials but on the civilian population. Some of the consequences: The sanctions reduced the public’s caloric intake, increased disease and mortality (for both adults and infants), and displaced millions of Venezuelans who fled the country as a result of the worsening economic depression and hyperinflation. They made it nearly impossible to stabilize Venezuela’s economic crisis. These impacts disproportionately harmed the poorest and most vulnerable Venezuelans, write the authors.
Suicide terrorism remains one of the most publicly present, yet still least understood, global phenomena of our time. Although partly removed from Western public debate after a period of relative quiet, the return of so-called Islamic State leader Abu Bakr al-Baghdadi in May 2019 to public visibility with the promise of revenge and further suicide attacks could bring the issue back to the fore. In order to be prepared, a better understanding of the underlying motives and backgrounds is needed. The author offers a provocative and useful analysis.
One older line of economic analysis suggests that income and wealth concentration are not only unjust in some circumstances but also can operate as significant sources of systemic fragility in market economies. The issue is that losses below the top of the distribution can impede the functioning of consumer goods markets. That in turn deprives the macroeconomy of the consumer demand needed to support employment and investment, writes Robert Hockett in Part I of his analysis. This thinking is relevant today.
—Jeff Madrick