Found 79 article(s) for author 'Martin Feldstein'

China’s New Path

China’s New Path. Martin Feldstein, April 29, 2013, Opinion. “The opaque nature of China’s government makes it difficult to see where Chinese economic policy is heading, and thus how the Chinese economy will develop in the years ahead. But the scale of China’s economy and its role in global trade and financial markets compel us to try to understand the intentions of China’s new leadership.  A useful starting point is to examine the key appointments that have been made since President Xi Jinping assumed office. One surprise was the decision to retain Zhou Xiaochuan as Governor of the People’s Bank of China (PBOC). Zhou had come to the end of his term…” Link verified April 3, 2014

Tags: ,

Bond Bubble Breakdown

Bond Bubble Breakdown. Martin Feldstein, April 22, 2013, Opinion. “Near multi-generational low bond yields, driven at least in part by US Federal Reserve asset purchases, have pushed the question of whether or not the bond market is a bubble to Top of Mind. We ask three experts if there is a “bond bubble”: Martin Feldstein (Harvard and NBER) – yes and the Fed is entirely to blame; Francesco Garzarelli (GS rates strategy) – no, but yields look expensive and the market is too complacent about rate hikes; and Paul McCulley (former PIMCO partner) – absolutely not and the Fed has done everything right…” Link verified April 3, 2014

Tags: ,

When Interest Rates Rise

When Interest Rates Rise. Martin Feldstein, March 30, 2013, Opinion. “Long-term interest rates are now unsustainably low, implying bubbles in the prices of bonds and other securities. When interest rates rise, as they surely will, the bubbles will burst, the prices of those securities will fall, and anyone holding them will be hurt. To the extent that banks and other highly leveraged financial institutions hold them, the bursting bubbles could cause bankruptcies and financial-market breakdown. The very low interest rate on long-term United States Treasury bonds is a clear example of the current mispricing of financial assets…” Link verified April 3, 2014

Tags: ,

It’s time to cap tax deductions

It’s time to cap tax deductions. Martin Feldstein, March 13, 2013, Opinion. “President Obama’s recent meetings with members of Congress have raised hopes that a major fiscal deal will replace the “sequester” and put the federal debt on a healthier long-term path. But the key barrier to such a deal remains the disagreement between Republicans and Democrats about the balance between raising revenue and cutting government spending. Republicans say they are against any further increase in taxes. Democrats, including the president, say that any budget deal must include additional revenue as well as spending cuts. Fortunately, Democrats indicate that they want to raise…” Link verified April 3, 2014

Tags: ,

Two Dollar Fallacies

Two Dollar Fallacies. Martin Feldstein, February 28, 2013, Opinion. “The United States’ current fiscal and monetary policies are unsustainable. The US government’s net debt as a share of GDP has doubled in the past five years, and the ratio is projected to be higher a decade from now, even if the economy has fully recovered and interest rates are in a normal range. An aging US population will cause social benefits to rise rapidly, pushing the debt to more than 100% of GDP and accelerating its rate of increase. Although the Federal Reserve and foreign creditors like China are now financing the increase, their willingness to do so is not unlimited…Link verified April 3, 2014

Tags: , ,

A Simple Route to Major Deficit Reduction

A Simple Route to Major Deficit Reduction. Martin Feldstein, February 20, 2013, Opinion. “Putting a cap on tax expenditures—those features of the tax code that are a substitute for direct government spending—can break the current fiscal impasse and prevent the dangerous explosion of the national debt. If a cap is combined with entitlement reforms, the government will also be able to reduce tax rates and increase some spending to accelerate the economic recovery. Republicans and Democrats agree that deficits must be cut and the ratio of federal-government debt to GDP reduced. But Republicans want to reduce the deficit by cutting government spending while Democrats…” Link verified April 3, 2014

Tags: ,

The Wrong Growth Strategy for Japan

The Wrong Growth Strategy for Japan. Martin Feldstein, January 17, 2013, Opinion. “Japan’s new government, led by Prime Minister Shinzo Abe, could be about to shoot itself in the foot. Seeking to boost economic growth, the authorities may soon destroy their one great advantage: the low rate of interest on government debt and private borrowing. If that happens, Japanese conditions will most likely be worse at the end of Abe’s term than they are today. The interest rate on Japan’s ten-year government bonds is now less than 1% – the lowest in the world, despite a very high level of government debt and annual budget deficits. Indeed, Japan’s debt is now roughly 230% of GDP…” Link

Tags: , , , ,

The Fed’s Dangerous Direction

The Fed’s Dangerous Direction. Martin Feldstein, January 3, 2013, Opinion. “The Federal Reserve is heading in the wrong direction. What the central bank describes as “unconventional monetary policy” is creating dangerous bubbles in asset markets that will lead to higher future inflation and is supporting the explosive growth of the national debt. Its new “communications strategy” will, moreover, only further confuse markets. The Fed’s recently announced plan to buy $85 billion a month of government bonds and mortgage-backed securities will keep long-term interest rates at historic lows, with a 1.6% yield on 10-year Treasuries and a negative yield on 10-year TIPS…”  Link verified April 3, 2014

Tags: ,

The Tax Hike Canard

The Tax Hike Canard. Martin Feldstein, January 1, 2013, Opinion. “Five years ago, the United States’ budget deficit equaled 1.5 percent of GDP and its national debt stood at 36 percent of GDP. This year, the deficit will exceed $1 trillion, or seven percent of U.S. GDP. Over the same period, the debt ratio has doubled to 73 percent of GDP. Although the United States’ economic weakness has contributed to the booming deficit and debt ratios, it is only a small part of the whole story. According to projections by the U.S. Congressional Budget Office, without significant reforms, the deficit would still add up to more than five percent of GDP a decade from now, even if the economy were operating at full capacity…” Link verified April 3, 2014

Tags: ,