"The United States’ economy is currently growing at 1.5% per year (about a full percentage point less than potential)"
- Sorry Mr. DeLong, Economy seems to disagree with you by growing 1.5% less than you expect it to grow.
"Over the following century, economists like John Stuart Mill, Walter Bagehot, Irving Fisher, Knut Wicksell, and John Maynard Keynes devised a list of steps to take in order to avoid or cure a depression."
- Has it occurred to Keynesians that at zero interest rate, value of any risk free investment with any rate of return is theoretically infinite; so assets can suck in all the liquidity - which is supposed to have driven goods and services sectors?
As a result, India’s Congress-led government has irretrievably lost the public’s confidence
- No point in being partisan Mr. Singh. People have no faith in the whole of India's political class in general. True, I feel this should exclude you, but you are in an insignificant minority among politicians of India. Governance in India has deteriorated to such an extent that politicians rule through goons instead of the legitimate machinery of the state. The legitimate machinery of the state is used only to obstruct justice, not in strengthening it. By hitting on Congress don't make me present my case against your BJP government in Karnataka state. It has been the most corrupt government in the History of Karnataka state. It is time that you stopped blaming Congress and started thinking of changing the system.
NHD - whats the point? Let us say a large number of similarly built small banks operate. Their internal incentives, work ethics etc. may remain similar. If the external environment encourages and rewards specific type of risk taking, most organisations would react similarly. The problem is not regulation or restricting size. Instead of one large organisation failing, we may have many small similarly built organisations failing simultaneously, period.
This is not an economic analysis of the problem. What is wrong with the US macroeconomics - no answer. How to fix the deficit - one can fix it by looking at it like an economist or as an accountant. For an economist deficit indicates some imbalance in the economy and a solution will be based on such an analysis. An accountant would add up figures and give a solution. Reads like an accountant look at economics.