For use in ISF 2023 course on “Modeling & Forecasting the International Dimensions”.
Some Data:
Term spread and growth/recession data (xlsx)
Interest rates and forward rates (xlsx)
Some Slides
slides (I) Saturday Morning
slides (II) Saturday Afternoon
slides (iii) Sunday Morning
slides (iv) Sunday Afternoon
Some Readings:
- “Do Foreign Yield Curves Predict U.S. Recessions and GDP Growth,” NBER Working Paper No. 30737 (Dec 2022) (with Rashad Ahmed). [PDF]
- “The Predictive Power of the Yield Curve across Countries and Time,” International Finance (March 2015) [PDF] Also NBER Working Paper No. 16398 (Sept. 2010) (with Kavan Kucko). [PDF]
- “Supply Capacity, Vertical Specialization and Trade Costs: The Implications for Aggregate U.S. Trade Flow Equations,” Mimeo June 11, 2010. [PDF]
- “A Forensic Analysis of Global Imbalances,” Oxford Economic Papers (2013), (March 2013 version) (with Barry Eichengreen and Hiro Ito). [PDF].
- “A Requiem for “Blame It on Beijing”: Interpreting Rotating Global Current Account Surpluses,” Journal of International Money and Finance 2021 (with Hiro Ito). [PDF]
- “Medium Term Determinants of Current Accounts in Industrial and Developing Countries: An Empirical Exploration,” Journal of International Economics59(1) (January 2003). (with Eswar Prasad, IMF) [PDF]
- “The New Fama Puzzle,” IMF Economic Review 2022 (with Matthieu Bussiere, Laurent Ferrara and Jonas Heipertz). [PDF]
- Exchange Rate Prediction Redux: New Models, New Data, New Currencies,” Journal of International Money and Finance (2019) 95: 332-362 (with Yin-Wong Cheung, Antonio Garcia Pascual and Yi Zhang) [PDF].
Additional Links:
K. Forbes, “Inflation Dynamics,” Brookings Papers on Economic Activity (Fall 2019).
second spreadsheet link is broken
Anonymous: Thanks, link is fixed now.
😀
A Crisis Erupts in Russia
The Kremlin is accusing a Russian mercenary of an attempted coup—a stunning development that could change the course of the war in Ukraine.
https://www.theatlantic.com/international/archive/2023/06/russia-crisis-coup-prigozhin/674516/
A simmering political feud in Russia has exploded into a crisis. The head of a Russian mercenary army fighting in Ukraine alongside Moscow’s official military forces has declared war against the Russian ministry of defense, claiming that Russia’s war in Ukraine was all the result of a giant plot by defense bureaucrats to mislead Russian President Vladimir Putin into a pointless conflict. Yevgeny Prigozhin, the head of the Wagner private military company, also claims that Russian government forces struck his men and inflicted numerous casualties. The Russian defense ministry denies any involvement with the strike, but Prigozhin has gone, literally, on the warpath, claiming that he will march into the southern Russian city of Rostov and onward if necessary to topple the corrupt officials leading the Russian defense ministry and military high command. He is asking Russian police and military forces to stand aside while he gets “justice” for his troops, and then “justice for Russia.”
Now we understand why JohnH has been on his emotional tirades. Prigozhin will probably cut off the dog food from Putin’s favorite pet poodle.
pgl can worry about Putin if he wants. I care about bad US policy, including endless wars that are horrendously expensive, pointless and futile.
Putin can take care of himself.
Really? What wars are U.S. forces fighting?
And aren’t there millions of people in Russia other than Putin? Millions more in Ukraine? Isn’t Russia a nuclear power? Whether “Putin can take care of himself” is hardly the point, boy. There’s more to the world than your pet issues.
Ducky still won’t address the point—bad US policy. He’d rather waste money fighting a proxy war in Ukraine to maintain US global primacy than redirect US priorities to make the budget deficit sustainable, to provide universal health insurance (the US is the only developed country in the world without it.) Or we could do lots of other things, such as helping struggling families with a larger EITC, subsidize pre-K and childcare, or end homelessness. But no! Ducky insists that we forego all that just so that the US can be “king of the mountain!” (Of course, Ducky conveniently forgets that constant involvement in pointless and futile wars is a classic way for empires to squander their position.)
And Ducky gladly forgets that “The US controls about 750 bases in at least 80 countries worldwide and spends more on its military than the next 10 countries combined.” (Ducky’s response: no problem!)
And Ducky chooses to ignore that “Over the past 20 years alone, the US has spent $8 trillion on its so-called “global war on terror” according to the Costs of War project at Brown University. The war in Afghanistan accounts for $2.3 trillion which, according to Brown University researchers, equals more than $300 million a day for 20 years.
$2.1 trillion was spent on the wars in Iraq and Syria, and $355bn was attributed to other wars. The rest of the money includes in excess of $1bn in interest payments for the huge amounts of money borrowed to fund the wars as well as more than $2.2bn in obligations for veterans’ care over the next 30 years. This means that, even after the US has left Afghanistan, it will continue to pay for the wars for years to come.”
https://www.aljazeera.com/news/2021/9/10/infographic-us-military-presence-around-the-world-interactive
Ducky’s response: gotta remain ‘king of the mountain,” no matter the cost! Spoken like a true neocon! Cheney would have been prooud.
“Ducky still won’t address the point—bad US policy.”
Jonny boy back to blaming Biden for Putin’s war crimes. Or is this Jonny boy praying for more dead Ukrainian children and more rapes of Ukrainian women by Russian soldiers.
Dude – you are the most disgusting piece of trash in the history of trolling.
Ducky’s response: gotta remain ‘king of the mountain,” no matter the cost! Spoken like a true neocon! Cheney would have been prooud.
Gee Jonny – when Republican Mitch McConnell stages a filibuster in the Senate – is this really the same thing as invading a Central American nation during the 1850’s?
You know dude – you might want to learn to use a dictionary someday. Or a simple calculator.
Do keep proving our point that you lie about what other people have said as you are angry that you never graduate from preK.
Russia has the largest stockpile of nuclear weapons. It is bad enough a war criminal like Putin who is charge of these nukes. If a thug like Prigozhin ever takes charge, everyone should be worried.
Funny thing – little Jonny boy does not seem to be worried that the largest stockpile of nuclear weapons is owned between dueling war criminals.
Yea – Jonny boy cheering on war criminals as usual. I guess Belarus made sure you got your dog food this evening.
Rebellion in Russia. Who’d have thought?
Kevin Drum has a weird update:
https://jabberwocking.com/wagner-group-throws-in-the-towel/
Wagner Group throws in the towel
About five minutes after I wrote that Wagner mercenaries were advancing on Moscow at “light speed,” they suddenly . . . stopped. Yevgeny Prigozhin announced that he had accepted a personal deal to exile himself to Belarus while his troops would be pardoned and put under the control of the Ministry of Defense. It’s all over. That’s assuming this is on the up-and-up, not some kind of weird ruse. And who knows about that? Wait and see.
Two people we should never trust – Putin and Prigozhin
It is not really unusual for a mercenary army to become a problem for its paymaster, so it’s no real surprise that Putin has ended up facing down a mercenary army in Russia.
Russia and China both went through periods of clashing war lords on the way to the formation of the modern nation. Japan did, to, somewhat earlier. Those aren’t particularly good analogies to what’s happening in Rostov-on-Don. Seems to me the condottieri in 14th century Italy are a better model for the choice Putin made in allowing the Wagner Group to operate. John Hawkwood’s White Company was an independent political power, extorting payment from city states whenever he ran into financial difficulty.
William Walker’s mercenary antics were a persistent embarrassment to the U.S. government in the 1850s until the Royal Marines handed him over to Honduras, which promptly arranged a firing squad.
The Sack of Rome in 1527 resulted when the Holy Roman Empirer neglected to pay his mercenary supporters. Prigozhin’s constant demand for money and munitions boils down to the same issue, and some reports today suggest that money is one motive for his seizure of Rostov-on-Don.
The Wagner Group rebellion adds to the list of unforced errors by Putin.
machiavelli had no use for merc, [northern european/english white company] mercs were used by the power centers in italy in machiavelli’s time
Yep, Machiavelli dreamed of an army like the Roman during the Republic. (Martin van Creveld “A History of Strategy”)
Yep. If there ever was a real world chess board, it was Italy in the time of the condottieri. Not a good society in which to live, however much art, music and literature spilled out.
William Walker has gone down in history as one of the original filibusterers. His hallowed behavior is enshrined in US Senate procedures to this day. His government was officially recognized by the US (some things never change!)
As often is the case, Ducky gets his history wrong. “The British Empire saw Walker as a threat to its interests in the possible construction of a Nicaragua Canal.” It was the Royal Navy that turned him over to the Honduran government for execution.
https://en.wikipedia.org/wiki/William_Walker_(filibuster)
God are you stupid. Try reading carefully the first paragraph of your own link which described this dude as
an American physician, lawyer, journalist, and mercenary. In the era of the expansion of the United States, driven by the doctrine of “manifest destiny”, Walker organized unauthorized military expeditions into Mexico and Central America with the intention of establishing private colonies. Such an enterprise was known at the time as “filibustering”
Filibustering in this context does not mean what you suggest it means. And if you are defending manifest destiny – you are the biggest hypocrite ever created.
Poor Jonny boy could not be bothered to click on the link in his own Wikipedia source which defined filibustering asL
https://en.wikipedia.org/wiki/Filibuster_(military)
This article is about the military term. For the parliamentary procedure, see Filibuster.
Look up filibuster in Wiktionary, the free dictionary.
A filibuster (from the Spanish filibustero), also known as a freebooter, is someone who engages in an unauthorized military expedition into a foreign country or territory to foster or support a political revolution or secession. The term is usually applied to United States citizens who incited insurrections across Latin America, particularly in the mid-19th century, usually with the goal of establishing an American-loyal regime that could later be annexed into the United States. Probably the most notable example is the Filibuster War initiated by William Walker in Nicaragua in the 1850s.
William Wallker was not a US Senator. But Jonny boy once again proves he is the dumbest troll ever created.
Your own link
On May 1, 1857, Walker surrendered to Commander Charles Henry Davis of the United States Navy under the pressure of Costa Rica and the Central American armies, and was repatriated. Upon disembarking in New York City, he was greeted as a hero, but he alienated public opinion when he blamed his defeat on the U.S. Navy. Within six months, he set off on another expedition, but he was arrested by the U.S. Navy Home Squadron under the command of Commodore Hiram Paulding and once again returned to the U.S. amid considerable public controversy over the legality of the navy’s actions.
Your claim that the US enshrined this mercenary is either a lie or more evidence of how utterly stupid you really are. Macroduck’s description may not have been perfect but it was more accurate than your intellectual garbage.
Jonny boy claims the US government sanctioned William Walker’s “government” without telling us whether that was Baja California or Nicaragua. I suspect this babbling idiot meant the latter but could we go beyond relying only on a Wikipedia link that little Jonny boy did not understand (can you say filibuster?)
https://www.history.com/news/manifest-destiny-william-walker-filibuster-nicaragua-mexico-invasion
‘The practice of filibustering, or “freebooting,” took place without the consent of the U.S. government, in clear violation of the Neutrality Act passed in 1818, which banned attacks made from U.S. soil against nations with which the country was at peace. To make matters even more complicated, many filibusters were Southerners who sought to expand slavery’s reach into the territory they seized, exacerbating tensions at home that would eventually explode into war.’
Maybe little Jonny boy does not know that the aims of these slave owners were opposed by many in the North. I guess our favorite moron never heard of the Civil War. Now Walker’s exploits of California and Mexico were so bad we see this:
‘While Walker’s invasion of Mexico angered both the Mexican and the U.S. government, it was extremely popular with the American public, who saw filibusters as champions of Manifest Destiny. Bands of eager recruits headed down to join his expedition, and by January 1854 he had around 300 men under his command. But enthusiasm did not make up for the mission’s lack of adequate supplies, or for Walker’s weaknesses as a leader…By May, however, he was forced to abandon this plan and march northward to the U.S. border with his remaining force of fewer than 35 men. After a final standoff with the Mexican resisters at the border, the Americans surrendered to the detachment of U.S. soldiers in San Diego, ending Walker’s first filibustering expedition. When Walker underwent trial in San Francisco for violating the Neutrality Act, a jury acquitted him in just eight minutes, showing the strength of U.S. public opinion in his favor. Within a year, he would launch another filibustering campaign in Nicaragua, with far more success.’
The good news being Walker’s incompetence helped the US and Mexico government stopped Walker here but off to Nicaragua!
‘Taking advantage of a civil war in Nicaragua, Walker aligned himself with one faction against the other, and in October 1855 led a combined American-Nicaraguan force of nearly 300 in capturing the former Spanish colonial city of Granada. Walker declared himself president, and the U.S. government even recognized him as such in 1856. During his time in Nicaragua, Walker made powerful enemies, including U.S. shipping and railroad tycoon Cornelius Vanderbilt, who sent soldiers to overturn his government after Walker revoked Vanderbilt’s rights to ship through Nicaragua. Vanderbilt’s men joined forces from other Central American nations, including Costa Rica, Guatemala, Honduras and El Salvador, which feared Walker might target them next.’
10 months in power only to be ousted by another American. We know Jonny boy flunked economics but his knowledge of history is far worse.
Another account of the misdeeds of William Walker which begins by schooling stupid little Jonny boy on the two different meanings of filibuster:
https://allthatsinteresting.com/william-walker
Modern-day filibusters usually happen in the U.S. Senate when a long-winded Senator feels like speaking out against an issue. Even the threat of filibustering may kill legislation, especially if more than one Senator gets together in protest. Back in the 1800s, filibustering meant something totally different. It meant killing people, not legislation. Specifically, the original filibuster stood for engaging in illegal military activity against peaceful nations.
Of course had Jonny boy bothered to READ his own Wikipedia link he would have known this. But Jonny boy never learned to READ.
The Wagner Group seems to advancing on Moscow at light speed
https://jabberwocking.com/the-wagner-group-seems-to-advancing-on-moscow-at-light-speed/
Kevin Drum reports on how Yevgeny Prigozhin has turned on Putin. Something tells me that Putin’s pet poodle Johnh is about to lose his precious dog house in the Kremlin.
Yes indeed, Wagner is advancing on Moscow at breakneck speed! In fact, “Russian mercenary group revolt against Moscow fizzles but exposes vulnerabilities.” https://apnews.com/article/russia-ukraine-wagner-prigozhin-9acbdf1eda849692ca0423a4116058d1
What’s most interesting is that the Russians apparently didn’t even fire a single shot! Now that was a serious coup attempt!
But pgl sure did love that goon Prigozhin for as long as it lasted…which just goes to show what kind of despicable mobsters pgl supports!
I noted Prigozhin was a war criminal well before little Jonny boy did. Oh wait – little Jonny boy got off on how the Wagner Group were helping Putin commit war crimes. BTW – Prigozhin has only made a tactical retreat. He will be back. Not sure if Putin is going to return to the Kremlin soon as the last anyone saw him he was fleeing Moscow.
Hey Jonny boy – who is going to feed you that dog food this week? Ahh Jonny the pet poodle is going to be neglected.
While waiting for fresh Russia-battling-Russia headlines, might as well think about economics. Most of the chatter about the U.S. economy lately has been that recession risk is receding. That’s despite a massively inverted yield curve and Fed folk talking about more rate hikes. Seems like a good time to look at the foreign sector for clues. The latest big data surprise come from Europe –
Eurozone factory PMI:
https://tradingeconomics.com/euro-area/manufacturing-pmi
Eurozone composite PMI:
https://tradingeconomics.com/euro-area/composite-pmi
Following two quarters of modest decline in Eurozone GDP, sharper than expected drops in both PMIs is getting a good bit of attention – maybe Europe’s contraction will be longer than expected?
Mexico and Canada are holding together pretty well, but China is looking rocky; the PBOC has responded with modest rate cuts, but fiscal policy tools look pretty worn out.
Most developed-economy central banks continue to tighten policy, and that suggests flatter yield curves abroad. Menzie has been pretty clear about what that means for the U.S.
We know that slower growth and higher rates are putting a major strain on emerging market debtor nations, with China standing in the way of debt resolution. One mystery to me is the financial situation of rapidly growing Asian economies – the growth champions of recent years. Need to look at those.
In all, the international setting is not great for the U.S. Three big issues are the trade impulse, financial risk and import/export price effects. Trade seems obvious. The other two often prove tricky to pin down, and I haven’t a clue.
https://econbrowser.com/archives/2023/06/the-term-spread-1970-2023m06#comment-300582
June 22, 2023
JohnH is a recent comment said both the dumbest thing I have ever read and the most dishonest thing too. The dumb? Jonny boy wants defense spending to return to Trumpian levels to balance the budget. You guessed it – defense spending was higher under Trump than under Biden but Jonny boy is too dumb to know that.
https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDNdLCJkYXRhIjpbWyJjYXRlZ29yaWVzIiwiU3VydmV5Il0sWyJOSVBBX1RhYmxlX0xpc3QiLCI1Il1dfQ==
September 30, 2022
Defense spending was 58.0% of federal government consumption and
investment in 2020. *
$882.4 / $1,520.6 = 58.0%
Defense spending was 22.5% of all government consumption and investment in 2020.
$882.4 / $3,928.9 = 22.5%
Defense spending was 4.2% of GDP in 2020.
$882.4 / $21.060.5 = 4.2%
* Billions of dollars
https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDNdLCJkYXRhIjpbWyJjYXRlZ29yaWVzIiwiU3VydmV5Il0sWyJOSVBBX1RhYmxlX0xpc3QiLCI1Il1dfQ==
May 25, 2023
Defense spending was 55.6% of federal government consumption and
investment in January through March 2023. *
$967.0 / $1,739.9 = 55.6%
Defense spending was 20.8% of all government consumption and
investment in January through March 2023.
$967.0 / $4,654.9 = 20.8%
Defense spending was 3.7% of GDP in January through March 2023.
$967.0 / $26,486.3 = 3.7%
* Billions of dollars
Oh brother – your new BFF JohnH says the dumbest things so you dust off this classic of yours which is really dumb too.
https://watson.brown.edu/costsofwar/files/cow/imce/papers/2023/One-pager%20on%20Heidi%27s%20paper-3.pdf
https://watson.brown.edu/costsofwar/files/cow/imce/papers/2023/Peltier%202023%20-%20We%20Get%20What%20We%20Pay%20For%20-%20FINAL%20-%200608.pdf
June 8, 2023
We Get What We Pay For:
The Cycle of Military Spending, Industry Power, and Economic Dependence
By Heidi Peltier
The topline:
The United States consistently allocates most of its federal discretionary budget to the military. As a result, the military industry continues to gain disproportionately large amounts of power in the U.S. economy and political sphere, which in turn ensures continued growth in the military budget. This has the effect of squeezing out the resources and power of other sectors, and weakening the United States’ ability to perform core functions such as healthcare, infrastructure, education, and emergency preparedness. This perpetuates a vicious cycle: high military spending means the strong military sector will only continue to get political power and gain public trust, which will in turn ensure it receives disproportionate resources at the expense of other sectors, which means the military will take on roles that should go to other agencies, and the cycle repeats.
Discretionary Budget Authority By Agency
Fast facts:
● For Fiscal Year 2022, more than half of the discretionary budget went to national security spending.
● Of the money allocated to the Department of Defense, about half went to military contractors. About 30% of that went to the “Big 5” alone: Lockheed Martin, Boeing, Raytheon, General Dynamics, and Northrop Grumman.
● In 2022, the Department of Defense accounted for 34 percent of the civilian federal workforce, and Veterans Affairs made up another 20 percent, so that more than half of federal civilian employees are devoted to the military and veterans.
● The federal government workforce is comprised of about 3.5 million workers, if we include both civilians and uniformed active-duty personnel. Of this, about 72 percent is defense-related employment, including Department of Defense civilians, uniformed military personnel, and those working in Veterans Affairs. By comparison, the Department of Health and Human Services made up 4 percent of federal employees, and the Department of State only 1 percent.
● Dollar for dollar, spending on other sectors creates more jobs than spending on the military. Spending on other priorities such as clean energy, health care, or public education would create between 9 percent and 250 percent more jobs than the same amount of spending on the military.
Discretionary Spending Over Time
Job Creation
In Each Sector Per $1M of Federal Spending
The bottom line:
In the same way that the rich get richer and the poor get poorer, continuing to spend in this way will ensure that the military industrial sector grows at the expense of other, more generative economic sectors. This is a missed opportunity: reducing the military budget and funding other priorities such as healthcare, education, clean energy, and infrastructure will help increase other forms of security – the kind of meaningful human security rooted in good health, good living conditions, and a productive and well-educated society – while also increasing employment nationwide.
pgl apparently doesn’t think that the national debt and annual deficits will ever need to be addressed! He subscribes to the Dick Cheney school of fiscal responsibility–“Deficits don’t matter.”
Jeffrey Frankel’s guest contribution suggested that deficits may actually matter once again. This would require the US to “seek sustainability in U.S. Debt”
The Committee for a Responsible Budget provided a tool that allows Americans to choose what cuts and revenue increases they would prefer. I listed out my biggest heavy hitters: an ultra millionaire tax, the corporate tax rate restored to 28%, lifting the payroll tax cap, and reducing defense spending to 2022 level.
But pgl won’t say what spending cuts and revenue increases he prefers. He only wants to mock what others would accept.
Worse, pgl is totally unconcerned by the size of “defense” expenditures rife with massive waste, fraud, and mismanagement. And he sees absolutely no need for the “defense” department to pass an audit that would account for what it has spent its money on. And he could care less that $200 billion was allocated for 2022 spending on the Ukraine kleptocracy without the oversight of an inspector general.
So, come on, pgl. Man up! Tell us where your preferred spending cuts and revenue increases would come from. Well, I can tell you that pgl won’t man up…he’s too much a fan of Dick Cheney’s “deficits don’t matter” philosophy.
Johnny just made up a strawman pgl – again. Johnny can’t manage to hold his own in an honest argument with pgl – or anyone else, apparently – so he assigns weak positions to others and attacks those made-up positions. If Johnny had an ounce of intellectual courage, he’d address pgl’s actual arguments. He doesn’t, because he can’t.
I have had to deal with this worthless liar since the Mark Thoma days. Jonny boy ruined that excellent blog and now he wants to ruin this one.
pgl’s actual arguments? Beyond snarking pgl actually makes arguments? Where are his proposals for making the debt sustainable?
Look just because you cannot add 2 plus 2 does not mean the actual economics we present are not reasonable positions. Come on Jonny boy – we know you are stupid. Get over at and quit throwing your stinky diapers at the smart kids in preschool.
“pgl apparently doesn’t think that the national debt and annual deficits will ever need to be addressed! He subscribes to the Dick Cheney school of fiscal responsibility–“Deficits don’t matter.”
Dude – this is why no one likes you. Repeating a bald faced lie does not make it true. But at least you have stopped insulting Dr. Frankel.
Can we all remind what little Jonny boy said about Frankel’s excellent post?
JohnH
June 20, 2023 at 5:02 am
Interesting that Frankel doesn’t touch defense spending. either cutting or slowing its growth. But he’s all for reducing the incomes of the elderly.
As Macroduck noted – the Jonny effect. But now Jonny boy wants us to believe he praised this post? Jonny boy is and always has been a two faced liar.
Sachs may still be recovering from the spanking he received from over 300 academics -including many from Columbia—regarding his numerous misstatements and tall tales about the necessity for the Russian presence in Ukraine. Like you, he’s heavily embedded in Russian propaganda and friendship with Russian propagandists.
Not to worry. You’re still Putin’s Pimp, but there’s competition on the horizon.
Jeffrey Sachs: “In the year 2000, the U.S. government debt was $3.5 trillion, equal to 35% of the Gross Domestic Product (GDP). By 2022, the debt was $24 trillion, equal to 95% of GDP. The U.S. debt is soaring, hence America’s current debt crisis. Yet both Republicans and Democrats are missing the solution: stopping America’s wars of choice and slashing military outlays.
Suppose the government’s debt had remained at a modest 35% of GDP, as in 2000. Today’s debt would be $9 trillion, as opposed to $24 trillion. Why did the U.S. government incur the excess $15 trillion in debt?
The single biggest answer is the U.S. government’s addiction to war and military spending. According to the Watson Institute at Brown University, the cost of U.S. wars from fiscal year 2001 to fiscal year 2022 amounted to a whopping $8 trillion, more than half of the extra $15 trillion in debt. The other $7 trillion arose roughly equally from budget deficits caused by the 2008 financial crisis and the Covid-19 pandemic.
Facing down the military-industrial lobby is the vital first step to putting America’s fiscal house in order
To surmount the debt crisis, America needs to stop feeding the Military-Industrial Complex (MIC), the most powerful lobby in Washington.
https://www.commondreams.org/opinion/military-spending-debt-crisis
“And it’s bipartisan. This isn’t Republicans or Democrats. NEITHER PARTY WANTS TO TALK ABOUT THE ELEPHANT IN THE ROOM, which is that we are currently at an incredibly destructive, disastrous and, I would say, avoidable war. The toll is rising, of course, in destruction and human lives, but also in outlays. You mentioned the $113 billion. And there’s more to come, if this administration gets its way. They’re not talking about this in these negotiations. [THE ADMINISTRATION] IS TALKING ABOUT CUTTING HELP FOR THE POOREST PEOPLE IN THE COUNTRY AND TO CONTINUE THE WARMONGERING AND FEEDING THE MILITARY-INDUSTRIAL COMPLEX.”
https://www.democracynow.org/2023/5/24/jeffrey_sachs_defense_spending_us_debt
ELEPHANT IN THE ROOM is a nice description of Donald Trump who did massively increase defense spending. But little Jonny boy wanted us to believe he did not. You have the spine of a Kevin McCarthy.
https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
February 6, 2021
The Chinese ‘Debt Trap’ Is a Myth
The narrative wrongfully portrays both Beijing and the developing countries it deals with.
By DEBORAH BRAUTIGAM and MEG RITHMIRE
China, we are told, inveigles poorer countries into taking out loan after loan to build expensive infrastructure that they can’t afford and that will yield few benefits, all with the end goal of Beijing eventually taking control of these assets from its struggling borrowers. As states around the world pile on debt to combat the coronavirus pandemic and bolster flagging economies, fears of such possible seizures have only amplified.
Seen this way, China’s internationalization—as laid out in programs such as the Belt and Road Initiative—is not simply a pursuit of geopolitical influence but also, in some tellings, a weapon. Once a country is weighed down by Chinese loans, like a hapless gambler who borrows from the Mafia, it is Beijing’s puppet and in danger of losing a limb.
The prime example of this is the Sri Lankan port of Hambantota. As the story goes, Beijing pushed Sri Lanka into borrowing money from Chinese banks to pay for the project, which had no prospect of commercial success. Onerous terms and feeble revenues eventually pushed Sri Lanka into default, at which point Beijing demanded the port as collateral, forcing the Sri Lankan government to surrender control to a Chinese firm.
The Trump administration pointed to Hambantota to warn of China’s strategic use of debt: In 2018, former Vice President Mike Pence called it “debt-trap diplomacy”—a phrase he used through the last days of the administration—and evidence of China’s military ambitions. Last year, erstwhile Attorney General William Barr raised the case to argue that Beijing is “loading poor countries up with debt, refusing to renegotiate terms, and then taking control of the infrastructure itself.”
As Michael Ondaatje, one of Sri Lanka’s greatest chroniclers, once said, “In Sri Lanka a well-told lie is worth a thousand facts.” And the debt-trap narrative is just that: a lie, and a powerful one.
Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota. A Chinese company’s acquisition of a majority stake in the port was a cautionary tale, but it’s not the one we’ve often heard. With a new administration in Washington, the truth about the widely, perhaps willfully, misunderstood case of Hambantota Port is long overdue….
Deborah Brautigam is Bernard L. Schwartz Professor of International Political Economy at the School of Advanced International Studies at Johns Hopkins University. Meg Rithmire is F. Warren McFarlan Associate Professor at Harvard Business School.
It’s not clear why ltr has linked to this article here, but I’ll guess. My guess is that ltr means it as a response to what I wrote above:
“We know that slower growth and higher rates are putting a major strain on emerging market debtor nations, with China standing in the way of debt resolution.”
If so, then let’s be clear – the Brautigam/Schwartz article in no way addresses current problems with emerging economy debt. That article focuses on one project in Sri Lanka at a time when Sri Lanka was faltering under debt made difficult to pay due to Covid. The article focuses on rhetoric having to do with that project. It focuses on a Sri Lanka at a time when that country owed little to Chinese creditors.
The current problem with emerging economy debt to China is that China is a, sometimes the, major creditor to several highly indebted emerging economies, that China insists on being first in line for payment when international standards do not allow after-the-fact subordination of debt, and that China’s repayment demands prevent renegotiation of debt. China is the biggest impediment to debt relief for several highly indebted countries.
So assuming ltr has dug out this article as a rebuttal to my comment, her rebuttal is either dishonest or ignorant; that is to say, not a legitimate rebuttal at all.
But then, that’s pretty common in ltr’s defense of China’s bad behavior.
China’s demands are the biggest problem for debt resolution for several debtor nations.
https://econbrowser.com/archives/2023/06/two-data-sets-and-some-papers#comment-300687
June 24, 2023
China standing in the way of debt resolution….
https://www.tandfonline.com/doi/full/10.1080/23792949.2019.1689828
December 6, 2019
A critical look at Chinese ‘debt-trap diplomacy’: the rise of a meme
By Deborah Brautigam
Abstract
In 2017, a meme was born in a think tank in northern India: Chinese ‘debt-trap diplomacy’. This meme quickly spread through the media, intelligence circles and Western governments. Within 12 months it generated nearly 2 million search results on Google in 0.52 seconds and was beginning to solidify into a deep historical truth. Stories can contain truths and falsehoods. Human emotions, including negativity bias, prime us to think in certain ways. This paper retells a series of stories about China’s international involvement, including in Angola, Djibouti, Sri Lanka and Venezuela, that challenge the media’s spin. It concludes with some suggestions about the relationship between academia and the media and policy worlds, and the need for scholars to speak ‘truth’ to ‘power’.
Deborah Bräutigam is the Bernard L. Schwartz Professor of Political Economy and Director of the China Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies.
https://www.globaltimes.cn/page/202304/1288809.shtml
April 10, 2023
West’s ‘rhetorical trap’ about Chinese financing in Africa is exposed
China’s Foreign Ministry on Monday said that China is not a source of so-called “debt traps” for African countries, but instead a partner that helps Africa and developing countries elsewhere to reduce poverty, saying that US and Western politicians’ “rhetorical trap” is fully exposed, which is losing appeal.
Responding to recent remarks by some US officials and officials of the World Bank that blame China for debt issues in Africa, Wang Wenbin, a spokesperson for the ministry, said that those comments are untenable.
Wang said that China is committed to providing support for the economic and social development of developing countries, including African countries, and has always carried out investment and financing cooperation with developing countries based on equality and mutual benefit.
“China is not the source of ‘debt traps’ for African countries, but a partner helping African countries and other developing countries get out of the ‘poverty trap’,” Wang said.
Western officials, particularly those in the US, have been smearing China’s cooperation with African countries and other developing nations. David Malpass, president of the World Bank, said in a recent interview with the BBC that he was “concerned about some of the loans China has been making to developing economies in Africa.”
US Vice President Kamala Harris and US Treasury Secretary Janet Yellen have also taken aim at China for debt issues in Africa. When talking about Zambia’s debt problem, Yellen has previously called China a “barrier” to debt reform in Africa, according to media reports.
Such remarks have been firmly rejected by Chinese officials, who dismissed them as rhetorical traps that aim to sabotage China’s cooperation with African countries and other developing nations.
“Some US and Western politicians have created various rhetorical traps in an attempt to disrupt China’s cooperation with developing countries. Their tricks have been seen through by the vast number of developing countries and the international community, and there is less and less of a market for them,” Wang said on Monday.
Chinese officials have also pointed out that multilateral lenders and commercial creditors are the biggest debt holders in many developing nations, while China has made contributions to help ease the debt burdens of developing countries.
During a trip to Africa in January, Chinese State Councilor and Foreign Minister Qin Gang said that China has always been committed to helping Africa ease its debt burden, noting that China is an active participant in the G20 Debt Service Suspension Initiative (DSSI). Qin also said that China has signed an agreement or reached a consensus with 19 African countries on debt relief, and it has suspended the largest amount of debt service payments among G20 members. *
* https://static1.squarespace.com/static/5652847de4b033f56d2bdc29/t/64303cd252cc4045dafc811f/1680882899126/Briefing+Paper+9+-+China+and+DSSI+-+April+2023+-+V5.pdf
April, 2023
Integrating China into Multilateral Debt Relief: Progress and Problems in the G20 DSSI
By Deborah Brautigam and Yufan Huang
Russian Ministry of Defense:
2021 – We are the second best army in the world
2022 – We are the second best army in Ukraine
2023 – We are the second best army in Russia
Ow, ow, ow!
Now that Russia’s government has promised to play nice with Prigozhin and vice versa, all is forgiven, right? No banana peels near open windows? I do wonder if Wagner Group mercenaries are still going to be absorbed into Russia’s military on July 1. Prigozhen goes back to serving hot dogs?
Let’s remember, Russians have taken over Russian cities in defiance of the Kremlin twice in recent weeks. As joseph reminds us, there are two armies in Russia, only one of which is under Kremlin control. Everyone in Russia, including Putin, now know that Putin’s seat is in play. Major battlefield wins are what Putin needs, but if that were easy, the wins would already have happened. The alternative may be military and civilian shake-ups – remind everyone who’s in charge. That’s good for the short run, but generally understood to be a sign of weakness. Putin probably won’t be leaving Russia any time soon – too tempting for usurpers. Bad time to have front row seats.
This is sort of reminding me of 1917 when Russia had not one but two revolutions.
https://www.cnn.com/2023/06/25/europe/russia-prigozhin-wagner-insurrection-belarus-explainer-intl-hnk/index.html
A good summary of the last 2 days. It seems even Putin recognized that this may be a redux of 1917. Jonny boy’s only comment was that Putin can take care of himself? Actually it was Belarus who saved Putin who is looking really weak right now.
Of course little Jonny boy is not worried about the average Russian citizen. And of course Jonny boy has been cheering on the war crimes committed against that Ukrainians for over a year.
A lot of the smart people are saying this whole thing was a false flag cooked up between Putin and Prigozhin. Notice when Putin came out he kept calling Ukrainians Nazis which was a clue that Putin was more afraid of them or his own citizens than the Wagner Group.
Of course Jonny boy assures us that Putin can take of himself which is all that matters to Putin’s little pet poodle. The citizens of Ukraine and the citizens of Russia do not matter to Jonny boy as long as Putin keeps him his dog food.
Curious to see the names of “the smart people” saying this is a false flag. You are the first person I have seen even mention this idea, and frankly it doesn’t make much sense. But I’ll settle for just three names of these “smart people” who argue this is a false flag. Frankly it sounds like the kind of crap Alex Jones would spout off.
One person making the rounds yesterday was Yevgeny Prigozhi (former CIA). Whether she is smart or not – I’ll leave that to you. What the heck is going on is certainly a mystery.
@ pgl
Did you mean to say Rebekah Koffler?? I am going to assume that is what you meant to say but had a “brain fart” or typing error. (No biggie, I have them too)
If one creates a “false flag” [and this would have to be Putin in your scenario ] one creates a false flag in which one is the “victim” or to create intentional broad public misperception of events—a misperception advantageous to the creator of the “false flag”. There is no way in which one can read this as making Putin look “victimized” (weaker is NOT synonymous with victimized). And there is no way this gives Putin more leverage with Kremlin, the public, etc. The dude was his chef. PUTIN personally chose him for all those jobs.
Was I the only one who thought joseph’s line was so humorous (humorous because it’s dead on accurate) it sounded like a Jimmy Kimmel monologue joke??
@ Macroduck
I think you were asking this question in jest, but the running theory now is Wagner they will not be absorbed into Russia’s official military~~because Wagner are comprised heavily of rapists and pedophiles. And this is where the Letterman type joke is “So?? So is Russia’s regular army.”
Another almost assumed as fact future course of events is that Prigozhin will be assassinated within a 90-day time frame. My thoughts?? His father and stepfather are both of Jewish descent. i.e. Prigozhin is NO dumdum. Whatever the mainstream press has stamped as Prigozhin’s life expiration date, I would take the Vegas over on that, not the under.
Don’t fret Moses. They’re just taking him to a nice farm upstate where he can chase rabbits.
We should start a Prigozhin “death count down” on this website. I mean, I know it’s sick, it’s in poor taste, and certainly isn’t the Christian action to take, but maybe since Prigozhin is a mass murderer we can temporarily break “social norms”???
Who says over 90 days and who says under 90 days?? Let’s here it commenters!!!! I say over 90 days.
The Wagner failed attempt to oust Putin is being compared to the fail coup attempt in August 1991:
https://www.britannica.com/topic/1991-Soviet-coup-attempt
By 1991, hard-liners who once enjoyed absolute power had become restive as they saw their and their party’s control start to slip. In a desperate move to regain control, they seized Gorbachev and mounted a coup. On August 19 they announced that Gorbachev was “indisposed” and unable to govern. But this dramatic move proved to be a miscalculation with disastrous consequences for their cause. The plotters were horrified by the subsequent uproar, with protests erupting in major cities throughout the Soviet Union. They turned to a traditional totalitarian solution and sent in the army to restore order. When soldiers refused to fire on their fellow citizens—as dramatically symbolized by pictures of future Russian leader Boris Yeltsin addressing a Moscow crowd from the top of a tank—the coup was over. This failure proved terminal for the hard-liners. Instead of restoring the Soviet Union to its former centralized strength, the attempted coup all but ensured that the U.S.S.R. would fall apart and that Russia would lose its influence over Eastern Bloc states such as East Germany. Gorbachev returned to Moscow on August 22, 1991, after the coup had failed. The Soviet Union came to an end on December 31, 1991.
Gorbachev tried to be a decent leader. Putin is akin to these failed totalitarians but the Wagner Group is not exactly the kind of folks that anyone would want to lead them. Now if in 4 months, someone else could get Russians to turn on Putin, the entire world would be a better place.
Genuinely wondering if Menzie will later reveal to us his most positive cultural experience while hanging out in Virginia. Restaurant, museum, nature, or academic celebrity sighting.