Most economists are extremely alarmed about the effect of the expanding deficit on the current account. In 2004 the deficit stood at $668 billion, or 5.7% of the gross domestic product (GDP). For 2005 we have estimated that the deficit was around $788 billion, or 6.3% of GDP. As a result of the ballooning deficit, the value of US net external liabilities, expressed at historical cost, jumped to $5.1 trillion in 2005 from $4.3 trillion in 2004. As a percentage of GDP, net external liabilities climbed to 41% in 2005 from 37% in the previous year and 4.9% in 1980.

A Malawian farmer, discovering and applying principles worked out by the Romans millennia ago, has brought plenty to his small part of a drought-ridden part of Africa, as this article in the Christian Science Monitor describes.

He points out what is now obvious to those who think about it: (a) that food aid relieves people of the incentive to grow their own food; and (b) that education aid qualifies people to escape the rigors of working the soil for clean, indoor work that grows no food.

In today’s New York Times, in an article titled “A False Balance,” Paul Krugman seems to claim that corruption on the part of Republicans and “conservatives” is something special, apparently attributable to their being Republicans or “conservatives.” And since Jack Abramoff happens to be a Republican and a “conservative,” that’s a good enough excuse, according to Krugman, for throwing out any efforts at balanced reporting that may have been made in response t

The single most frustrating thing about being an economist, writes Robert Murphy, is that, 200+ years after its official birth, the field of economics hasn’t convinced the rest of the world about even its most elementary propositions.

The AP is reporting that the US saving rate was negative for all of 2005, something that hasn’t happened for 70 years:

A scan of this morning’s newspapers reveals that the Global Platonic Republic is about to launch a new campaign to fund its dangerous Collectivist ambitions on the broadest possible scale.

Cleverly, it has hit upon a one-two solution of undertaking a cynical expoitation of the economically-illiterate Bono-Geldorf generation’s anti-poverty wristband sloganeering, even as it plays on the scientifically-bewildered Soccer Moms’ angst-ridden ache to “Save the Planet” from the supposed depradations of their own monster 4x4, hyperconsumer shopping-wagons.

On page 1 of today’s New York Times, there is an article titled “Health Care, Vexing to Clinton, Is Now at Top of Bush’s Agenda.” Typical of The Times and the Left, the article treats the continuing rise in health care costs as a phenomenon of the free market and presents government intervention as the solution.