Posted on 04/24/2013 7:28:40 AM PDT by SeekAndFind
For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.
On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This "stimulus" spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.
On the other side were economists and politicians who wanted to cut spending to reduce deficits and "restore confidence." Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which economic growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and "confidence" would return.
This debate has not just been academic.
Those in favor of economic stimulus won a brief victory in the depths of the financial crisis, with countries like the U.S. implementing stimulus packages. But the so-called "Austerians" fought back. And in the past several years, government policies in Europe and the U.S. have been shaped by the belief that governments had to cut spending or risk collapsing under the weight of staggering debts.
Over the course of this debate, evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong. Japan, for example, has continued to increase its debt-to-GDP ratio well beyond the supposed collapse threshold, and its interest rates have remained stubbornly low.
(Excerpt) Read more at businessinsider.com ...
We should wear the badge with pride.
Krugman, is that you? Exports dropped 50 percent after Smoot-Hawley. Why do a repeat of a failed policy just because we hope that it makes some people happy? Bad economics is bad economics.
I’m not worried about China. China has no young people, America does. China looks tough but it’s a paper tiger.
Those of us with real lives or real jobs can't stay up to watch his drivel, the the dot com type kids that have flex hours stay up and watch his **it. That is correct heaven help us..
And make no mistake...any disaster will be blamed on conservatives. Krugman and his acolytes thinks that anyone who is concerned with saddling future generations with untold debt is "extreme".
Rewriting economic history to salvage the Kenyan is a pain in the ass. It means folks like me need to get off our ass and maintain the true records so that when a sensible administration comes around - they can get a handle on what is actually going on.
Again, the surest route to disaster is to eliminate all the gages. If you don’t know how much is in the tank you don’t know how far you can go.
There is some light reading for a Wednesday night. I should have waited an hour until I was trying to fall asleep.
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