Police restrain a student protesting against education cuts during a rally in Valencia, in eastern Spain, on Feb. 20. Spaniards are beginning to feel the effects of $20 billion in austerity measures, and discontent is growing.
Credit Pedro Armestre / AFP/Getty Images
The clashes in Valencia triggered protests across Spain. Here, students protest in Madrid on Wednesday.
We explore the economic philosophy of John Maynard Keynes. His ideas of government spending “priming the pump” during bad times have been applied by American leaders from FDR to Obama. But Keynsian theory continue to spark fierce debate – some feel it’s still the best way out of a slump – but others believe this distorts the free-market and that these ideas have run their course.
Many experts say reducing mortgage principal can help troubled homeowners stay in their homes. But two of the nation's largest mortgage holders, Fannie Mae and Freddie Mac, have not signed on to the idea.
Despite some green shoots in the economy, the housing sector remains weak. With 11 million Americans still underwater on their mortgages, some housing experts believe it's time for more dramatic solutions.
The idea of reducing the principal on the loans of underwater homeowners used to be a fringe concept, embraced by a few outliers. Today, many policymakers believe principal reduction is necessary to keep some troubled homeowners afloat.
But so far, the nation's biggest mortgage holders, Fannie Mae and Freddie Mac, haven't embraced the idea.
The goal of the Federal Reserve's low interest rate policy is to juice the economic recovery. The low rates should make it easier for people to borrow money, which they'll hopefully spend; the increased demand for goods and services is then supposed to translate into more hiring.
That's what the Fed is banking on. It hopes low interest rates will help with its mandate of achieving maximum employment, but it also has another mandate: to keep prices stable.
"In many cases, those two conflict," says economist Joe Gagnon of the Peterson Institute for International Economics.
Credit Patricia de Melo Moreira / AFP/Getty Images
Protesters against government austerity measures march in front of the Finance Ministry in Lisbon, Portugal, earlier this month. The country's debt crisis has prompted Portuguese workers to look to their country's former colonies for jobs.
Credit Patricia de Melo Moreira / AFP/Getty Images
Portugal's minister of foreign affairs, Paulo Portas (right), meets with his Angolan counterpart, Georges Chikoti, during a press conference in Lisbon, Portugal, in 2010. A growing number of Portuguese workers are seeking employment in their country's former, resources-rich African colony.
Portugal is burdened with such big debts that some are calling it "the next Greece." Unemployment is soaring, and the debt continues to rise, despite draconian austerity measures.
But Portugal has something Greece doesn't have: former colonies, rich in natural resources and in need of labor, both skilled and unskilled. And in a type of role reversal, some Portuguese are now traveling to those places in hopes of improving their lives.
Antonio Valerio, who is studying pharmaceutical science at a university, is among those who see no future in Portugal.
In a down economy, most folks are happy to find a crumpled five in a pair of old jeans, or turn in their saved quarters for a dinner out. Not David Wolman. David is a contributing editor at Wired Magazine, and author of the new book, The End of Money, which explores the notion that everyone might benefit from a cash-free world.
We talk to the author of a new book who says that Americans spend too much, save too little and borrow excessively and that we might look to countries in Europe and East Asia, where governments encourage thrift and saving rates are much higher. We’ll examine the financial habits of people on three continents over two centuries and what we might learn from it.
Sheldon Garon - Professor of History at Princeton University and author of “Beyond Our Means: Why America Spends While the World Saves”
Many say upward mobility isn't what it used to be in America, especially for those at the bottom of the economic ladder, and that the U. S. has become a less mobile society than other advanced nations. Still, skeptics point out that the country has grown wealthier overall, leading to higher incomes for new generations, even if they don’t move up in the class system.
One of the key consequences of the economic collapse a few years ago was the passage of a massive piece of legislation called the "Dodd-Frank Act." The bill was co-sponsored by (now-retired) Democratic Senator Chris Dodd of Connecticut and (soon-to-be-retired) Democratic Massachusetts Representative Barney Frank.
Originally published on Tue January 24, 2012 9:03 am
Tonight, President Obama is set to deliver the final state of the union address of his first term. Morning Edition's Renee Montagne spoke to White House Senior Adviser David Plouffe for a preview of the president's speech.