Thursday, January 16, 2014

China holds record US debt, and other assorted links

1. Bob Murphy on the folly of those supporting minimum wage increases.


2. China's holding of US debt reaches record levels.

This shouldn't be a surprise, as our debt has gone up dramatically during the last few years.  We'd be crazy to think that more debt wouldn't be owned by foreigners.  However, this has big implications.  When I teach macroeconomics I have discussions about why one should be more-concerned about the debt and why to be less-concerned about the debt.  When I first started teaching, one reason to be less-concerned about the national debt was that it was mostly owned by other Americans.  The reason is that in the future, paying down the debt meant some Americans are paying other Americans, so the country as a whole wouldn't be hurt.

When more debt is owned by foreigners, the national debt is more problematic.


3. Obama says he'll change laws himself, without congress.

How should one react when a president admits he'll break the law?  I'm a bit speechless.

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