-- Amos Kendall (1833)
A Brief Summary of Human History
Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.
But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.
-- Brad Delong
The man who is hard working and thrifty is to be regarded as ‘deserving’; yet these qualities owe much to the genes he was fortunate (or fortunate?) enough to inherit.”
The difference between making it back onto the tour and being demoted to the Nationwide might only be a couple of dozen golf shots over the course of a season, but the financial repercussions are huge. Prize money on the Nationwide is only about 10% of the tour’s. Last year’s top moneymaker on the PGA Tour, Luke Donald, made $6.7 million on the golf course; the top player on the Nationwide Tour made $414,000. Most Nationwide events are not televised, and endorsement deals are one-third as big, if not smaller. If playing on the PGA Tour is like having your product stocked at Wal-Mart, competing on the Nationwide is like selling through a regional supermarket chain.
If something everyone thinks they know -- Reagan's budgets blew up the federal debt in the 1980s -- turns out not be true, it's worth pointing out. Especially if you thought you knew it too.
If high interest rates and disinflation drove the rise in the federal debt ratio in the 1980s, it could happen again. In the current debates about when the Fed will achieve liftoff, one of the arguments for higher rates is the danger that low rates lead to excessive debt growth. It's important to understand that, historically, the relationship is just the opposite. By increasing the debt service burden of existing debt (and perhaps also by decreasing nominal incomes), high interest rates have been among the main drivers of rising debt, both public and private. A concern about rising debt burdens is an argument for hiking later, not sooner. People like Dean Baker and Jamie Galbraith have pointed out -- correctly -- that projections of rising federal debt in the future hinge critically on projections of rising interest rates. But they haven't, as far as I know, said that it's not just hypothetical. There's a precedent._____________________________