http://gregmankiw.blogspot.com/2011/07/good-exam-question.html
"
Mankiw: "Assuming the Fed does not pay market interest rates on those newly required reserves, it is like a tax on bank financing."
Well, I'm sold. Go Ron Paul!
Mankiw has to turn to the desperate It Will Hurt Small Business argument--you know, the small businesses that are getting so much funding from the big investment banks right now. You can almost see the sweat flying off his face.
Of course to Mankiw the funds that would now be available for government spending could not be a source for meaningful investment in the economy...
On Mon, Jul 4, 2011 at 3:36 AM, Marv Gandall <marvgand at gmail.com> wrote:
> Paul's libertarian friends are not amused...
>
> http://gregmankiw.blogspot.com/2011/07/good-exam-question.html
>
>
>> Then there's this from Ron Paul via Dean Baker:
>>
>> Ron Paul’s Surprisingly Lucid Solution to the Debt Ceiling Impasse
>> By Dean Baker
>> The New Republic
>> July 2, 2011
>>
>> Representative Ron Paul has hit upon a remarkably creative way to deal with the impasse over the debt ceiling: have the Federal Reserve Board destroy the $1.6 trillion in government bonds it now holds. While at first blush this idea may seem crazy, on more careful thought it is actually a very reasonable way to deal with the crisis. Furthermore, it provides a way to have lasting savings to the budget….
>
>
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