Mar 04 Do you think that overproduction or declining profit rates have contributed to the present subprime loan crisis? Question/Comment: Karl Marx, in his work “Capital,” alluded to the idea that overproduction contributed to a general historical tendency of capitalism to be undermined by declining returns on capital. Do you think that overproduction or declining profit rates have contributed… Continue reading
Mar 04 Do I receive a rebate if my only income is social security? Question/Comment: The only income I have is social security. Do I have to file my social security in order to get the rebate or will I get it automatically? Do I receive a rebate? Paul Solman: This Internal Revenue… Continue reading
Feb 22 Do countries such as China react to counter downward trends in the U.S. economy? Question/Comment: Do countries such as China, which are so dependent on a healthy stable U.S. economy, react to counter downward trends in the U.S. economy (e.g., recession)? If so, what kinds of steps do they take? Paul Solman: Yes,… Continue reading
Feb 19 How much of the U.S. economic problems are caused by the deficit and what percentage of the deficit is the Iraq war? Question/Comment: 1. How much of the U.S. economic problems are caused by the deficit? 2. What percentage of the deficit is the Iraq war? 3. How can the U.S. ever pay off the deficit, and how… Continue reading
Feb 19 If excess liquidity has caused these investments that are now going bad, how does the Fed increasing liquidity with lower interest rates help the economy? Question/Comment: If excess liquidity has caused these investments that are now going bad, how does the Fed increasing liquidity with lower interest rates help the economy? Paul Solman: Because it prevents the system from freezing up entirely. It’s a calculated… Continue reading
Feb 15 What is better, inflation or a recession? Question/Comment: I am a saver whose income is mostly CDs. We seem to be facing both a recession and inflation. Which of those two is better for me? I assume it is recession? Paul Solman: Neither is better for you… Continue reading
Feb 15 It’s been a long time since I took Econ. 101, but as I remember, if you keep printing ever-greater amounts of currency, inflation takes on a life of its own. Question/Comment: It’s been a long time since I took Econ. 101, but as I remember, if you keep printing ever-greater amounts of currency, inflation takes on a life of its own. Isn’t that what we’ve been doing at the rate… Continue reading
Feb 14 If I hear one more presidential (or candidate) speech about the imperative to rescue those poor subprime home owners, I will scream. Question/Comment: Paul, If I hear one more presidential (or candidate) speech about the imperative to rescue those poor subprime home owners, I will scream. Not one economist, not one candidate, no one ever addresses the painfully unregulated and rogue rental… Continue reading
Feb 11 Where is the Fed rate cut felt in the economy? Question/Comment: A Fed rate cut presumably has a cost; where is that felt? Paul Solman: Encouraging folks who made bad decisions before – invested stupidly, say, in mortgage-backed securities – to invest stupidly again, since the Fed will bail them… Continue reading
Feb 08 If the Dow Jones goes up by 200 points how are these 200 points measured? Question/Comment: If the Dow Jones goes up by 200 points how are these 200 points measured? Paul Solman: Roughly, the sum of the stock prices of the 30 companies in the Dow Jones industrial average, companies chosen as the biggest… Continue reading