Public debt after the pandemic

by John Quiggin on December 30, 2020

Another extract from my book-in-progress, Economic Consequences of the Pandemic

Over the course of the Covid-19 pandemic, governments around the world have issued huge amounts of public debt, much of which has been purchased by central banks. In the US, for example, Federal public debt increased by $3 trillion over the course of 2020 (this is about 15 per cent of US national income)

while the monetary base (money created directly by the Federal Reserve) increased by around $1.6 trillion. This money was used to buy government bonds along with corporate securities in open market operations (what is now called Quantitative Easing)

These policies represent a complete repudiation of assumptions which were considered unquestionable by the political class until relatively recently: that budgets should be balanced, and that public debt is always undesirable.

Even the most widely-accepted modifications of these assumptions are now problematic. A standard view is that budget balances should be stable over the course of the economic cycle. If measured appropriately, this entails a stable ratio of public debt to national income.

But where should this ratio be set?

[click to continue…]

Positive note #8: it’s recipe exchange time!

by Eszter Hargittai on December 30, 2020

Is there anyone who hasn’t spent more time in the kitchen this year than usual? Perhaps healthcare workers. I don’t eat bread so I skipped all the sourdough discussions, but I did end up trying all sorts of new recipes. I’ll just share one savory and one sweet, and am otherwise hoping folks will contribute their own favorites.

A Late Show with Stephen Colbert was my go-to daily entertainment watching the previous night’s episode around lunch time. I was so impressed by how he and his team pivoted to the lockdown. In one episode, he cooked a dish based on shallots with Alison Roman that sounded very intriguing since I like shallots, but few recipes ever call for more than a bit of it (or I don’t tend to know them, please educate me). I made the dish the next day and have made it a bunch of times since, it’s excellent. I substituted sardines for the anchovies, because I already had those at home and since it worked well for me, I’ve stuck with that variation.

For sweets, I tried a sweet potato casserole for the first time this Thanksgiving and was so impressed that I’ve made it twice since (and will definitely be making it again). It seems to be presented as a side dish, but in my book it’s definitely a dessert. I do recommend two modifications to that recipe though that I picked up on from reading the comments on the site: (1) half the white sugar (1/4 instead of 1/2 cup); (2) double the topping except for the butter. Commenters noted that it was too sweet otherwise and they were right. I forgot these modifications the last time I made it and it was indeed too sweet. It’s a straight-forward recipe and doesn’t even really require a food processor (I haven’t used one for it). Try it out!

Your turn, please share your finds (or oldies, but goodies if you prefer).