Cost of Recession and Austerity in Convenient Clock Form

You've probably heard of the U.S. Debt Clock. I'm not linking to it because its goal is to strengthen deficit hysteria, one of the techniques used to try to destroy the welfare state.

But have you seen the U.S. Lost Output Clock? This is much more informative, showing us just how high the cost of recession and slow recovery (due to austerity, especially at the state and local level) has been. The total now stands at over $5.2 trillion. (H/t @nielsandeweg and Dean Baker)

Here is the clock as of about 2:00pm EST January 22:

United States Lost Output Clock

$5,202,951,507,765

Lost National Income since the Financial Crisis of 2008.


Blue line = Potential GDP (if capital and labor are fully employed with adequate demand)
Red line = Actual GDP 

Source: http://www.lostoutputclock.com/

As noted, this is calculated by summing the distance between actual and potential gross domestic product. It's a scary picture, especially because there doesn't seem to be much recent change in the distance between the two lines.

Something worth looking at every few months as a reality check. It is, as Paul Krugman says, time to End This Depression Now!

January Tax-Cast Focuses on Romney's Favorite Tax Haven

The January Taxcast, from the Tax Justice Network, is just out.Though of course it says nothing about Mitt Romney, there is a great deal of focus on Romney's favorite tax haven, the Cayman Islands.

In addition, another valuable nugget, though given in far less detail, concerns transfer pricing. The bottom line is very simple: If you want to combat transfer pricing abuse, look at what India does, and do the same thing.

For your convenience, courtesy of TJN, you can launch the Taxcast here:

France Flirts with Recession as it Incomprehensibly Embraces Austerity

Dean Baker and Paul Krugman are just two of the economists who have noted recently that French President François Hollande has lost his mind. As Krugman notes, Hollande has quite literally invoked the discredited doctrine known as Say's Law, when Hollande said “supply actually creates demand.”

In other words, Hollande has fallen victim to austerity fever, despite its lack of success in other Eurozone countries such as Ireland. Baker points us to an ABC News report that is more specific about Hollande's plans: Despite 11% unemployment, he wants to cut government spending by about 4% in 2015-2017, a total of 50 billion euros (approximately $68 billion).

Take a look at the following chart: Does this look like an economy that can adopt austerity successfully?

From 0% growth in 2012 Q1 to -0.1% growth in 2013 Q3, five of the last seven quarters have seen zero or negative growth in gross domestic product. It is already a prime candidate for another recession. But Hollande seems determined to go over the austerity cliff.

Are these the policies that Hollande and his Socialist Party campaigned on in 2012? Do I really have to tell you?