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    Thoughts from the Frontline

    Back to the Basics

    July 15, 2011

    Choose your language

    This week we are going to revisit some themes concerning the problems of the debt and the deficit. I am getting a number of questions, so while long-time readers may have read most of this in one letter or another, it is clearly time for a review, especially given the deficit/debt-ceiling debate. I will probably offend some cherished beliefs of most readers, but that is the nature of the times we live in. It is the time of the Endgame, where things are not as black and white as they have been in the past.

    Let’s begin with a question that is representative of a lot of the questions I have been getting, from reader John:

    “John, it appears that you're arguing that two contradictory things have the same effect: adding government spending doesn't help the economy, and reducing government spending hurts the economy. Which is it? At first, you say that adding government spending doesn't help, no new jobs are actually created, it fails the sharp pencil test,…

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    Joe Toronto

    July 16, 2011, 3:02 p.m.

    “There are only two ways to grow an economy. Just two. You can increase the working-age population or you can increase productivity. Thatâ??s it.”

    um…. You can also employ the unemployed, which we currently have plenty of.

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