In his latest Economic Outlook, AEI economist John Makin warns us of Three Dangerous Myths about Monetary Policy which, if acted upon, could disrupt world markets.

In a just published piece, AEI economist and tax expert Alan Viard warns that the 2011 payroll tax holiday, which shaves 2 % points off workers’ Social Security tax rates, undermines historical practices and distorts federal budget priorities as it diverts $130 billion from the general treasury into the Social Security trust fund.

As fiscal stimulus packages unwind, fiscal drag may rise in the United States to a level equivalent to about 1.5 percentage points of GDP early in 2012.

The open letter signed by economists to Ben Bernanke urging him to discontinue the second round of QE2 was criticized widely and passionately as an attempt to politicize the Fed.

The Federal Reserve is considering attempts to stimulate the economy, but it should instead give up this nonsense about more stimulus and offer a credible long-term program to prevent the next inflation.

In less than twenty-five years, government “affordable housing” and other housing policies have turned a healthy market into a financial ruin. Until Fannie and Freddie’s market dominance and the government’s role in the housing finance system are substantially reduced or eliminated, the United States will continue to have an inferior and unstable housing market.

As the debt hangover works its way through the system, the outlook is for housing to continue along an extended rocky and bumpy bottom, generally moving sideways in nominal terms.

As we enter the fall of 2011, three years after the Lehman Brothers crisis, Europe and the United States are teetering on the brink of another, potentially more serious, systemic crisis.