housing economics guy Archives

Scary Savings

By Econ70 | 10/31/2013

The latest economic treat, the budget deficit fell to just 4.1% of GDP in 2013, the lowest level since 2008. Revenues were 16.7% of GDP, while expenditures were 20.8%. Rising revenues accounted for 79% of the deficit decline in 2013. The trick will be getting the annual deficit below 2.5% of GDP. As long as…

Quantitative Easing

By Econ70 | 10/29/2013

QE is not “printing money” as it does not increase the amount of money in circulation. Handing out $100 bills would be printing money. By purchasing Treasuries and MBS, the Fed raises the price of those securities and thus lowers interest rates. And lower rates can certainly result in an increased desire to borrow. But…

Furlough Farce

By Econ70 | 10/01/2013

With federal workers averaging $108,500/year in salary and benefits, if all 820,000 furloughed federal workers never came back, the total savings to the Treasury would be $90 billion/year. In a budget of roughly $3.5 trillion, that’s just 2.6% of all spending. Even as a percentage of the $642 billion FY13 deficit, a reduction of $90…