Recent comments by G. A. Pakela

• The Debt-Growth Controversy

  One would expect a correlation between high levels of accumulated debt and slow growth. High - 90% of GDP levels of government debt implies that government has taken on a dominent role in credit markets- possibly at the expense of private sector business borrowing. While the former temporarily boosts demand, the latter is what finances future growth as those investments lead to more hiring, which in a virtuous cycle, lowers unemployment and increases sustainable demand as newly hired employees are able to increase their consumption.

• Lives versus Profits

  Was the Yale test developed independently of the Myriad test? There are multiple statin drugs on the market, each with their own patent, the most prominent of which have expired. There is a cost to innovation, and property rights must be guarded for all including those of us who should own our own genes.

• When Is Government Debt Risky?

  How can you say that there is this large private demand for public debt when the Federal Reserve is spending $85 billion per month purchasing what is essentially the entire budget deficit? And how do low interest rates, distorted by (nearly) world-wide central bank intervention , raise the velocity of spending? Does that mean individuals and households are being discouraged from saving and are encouraged to ignore their long-term needs and spend like there is no tomorrow? Or does it mean that retirees are forced to liquidate their savings in order to live because the interest returns are too low? And exactly what are those potential gains from directing even more resources away from the private sector to government spending when the amount of fiscal stimulus has already been the highest ever, excepting WWII? Ultimately, your Keynesian theories rely on private sector spending and investment to replace the temporary increase in government deficit spending, but how is that to take place when there is this public policy hostility directed towards investors and businesses through increased taxes and regulatory burden? If your political party could actually make critical choices in spending, we could probably afford an extra couple of hundred billion on providing health care insurance.

• India’s Patently Wise Decision

  Why would investors or "big pharma" project managers spend the tens of millions of dollars over many years to develop, test and seek FDA approval for block buster drugs if any generic manufacturer can develop a generic version of that drug and sell it at its marginal cost of production. There would be no hope for that capital recovery. Now it is the case that drug manufactures can game the rules by seeking patent extensions for trivial improvements, but that is not what the professor is arguing here.
  
  This essay would be brutally dispatched in almost any graduate level economics seminar.

• The Promise of Abenomics

  Ever so optimistic! Let's hold your feet to the fire, Professor Stiglitz and let's see how well Japan performs over the next year, two or three years down the road.
  
  I think that a better policy would be for Japan to tighten spending and end the infrastructure profligacy and reduce its personal, VAT and corporate income taxes by 30% or more. Let the people decide how to spend their money and stimulate private sector growth that the same time!
  
  In fact, if a loss of confidence results in a destablized currency in Europe, Japan, Switzerland and the U.S., we can blame you, your colleague at Princeton and Dr. Bernanke for this massive, untried experiment in monetary easing.