Posted on 05/21/2010 6:47:18 AM PDT by SeekAndFind
Despite a chorus of voices claiming otherwise, we arent Greece. We are, however, looking more and more like Japan.
For the past few months, much commentary on the economy some of it posing as reporting has had one central theme: policy makers are doing too much. Governments need to stop spending, were told. Greece is held up as a cautionary tale, and every uptick in the interest rate on U.S. government bonds is treated as an indication that markets are turning on America over its deficits. Meanwhile, there are continual warnings that inflation is just around the corner, and that the Fed needs to pull back from its efforts to support the economy and get started on its exit strategy, tightening credit by selling off assets and raising interest rates.
And what about near-record unemployment, with long-term unemployment worse than at any time since the 1930s? What about the fact that the employment gains of the past few months, although welcome, have, so far, brought back fewer than 500,000 of the more than 8 million jobs lost in the wake of the financial crisis? Hey, worrying about the unemployed is just so 2009.
But the truth is that policy makers arent doing too much; theyre doing too little. Recent data dont suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth.
(Excerpt) Read more at nytimes.com ...
"In short, fear of imaginary threats has prevented any effective response to the real danger facing our economy.
Will the worst happen? Not necessarily. Maybe the economic measures already taken will end up doing the trick, jump-starting a self-sustaining recovery. Certainly, thats what were all hoping. But hope is not a plan. "
I hope we can get a change to the plan.
Does he realize that we would be lucky to have it as good as Japan? They at least saved. We, as a people, are spendthrifts.
For a while, my tagline was “Paul Krugman is always wrong”. What a tool.
Paul Krugman (He won a Nobel Prize don’cha know) is full of hope, and change, and a bunch of brown stuff............
In the early 80's, Congress made sure we'd always be so. There used to be a $600 tax free interest limit on passbook savings accounts. They took that away, and now EVERY SINGLE PENNY of interest is taxable. No incentive to save...............If adjusted for inflation, it would be over $1200 now.............
What a bunch of double-talk gobbledygook. The only think I could pick out of this was “don’t worry, keep spending tax money”.
"We are, however, after having followed my badly mistaken advice to implement Keynesian Government spending, looking more and more like Japan."
There goes Krugman, banging away on his one-note Keynsian piano.
“And what about near-record unemployment, with long-term unemployment worse than at any time since the 1930s? What about the fact that the employment gains of the past few months, although welcome, have, so far, brought back fewer than 500,000 of the more than 8 million jobs lost in the wake of the financial crisis? Hey, worrying about the unemployed is just so 2009. But the truth is that policy makers arent doing too much; theyre doing too little. Recent data dont suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth. Since then, however, rates have retraced that rise and then some. As of Thursday, the 10-year rate was below 3.3 percent. I wish I could say that falling interest rates reflect a surge of optimism about U.S. federal finances. What they actually reflect, however, is a surge of pessimism about the prospects for economic recovery, pessimism that has sent investors fleeing out of anything that looks risky hence, the plunge in the stock market into the perceived safety of U.S. government debt.... So what we should really be asking right now isnt whether were about to turn into Greece. We should, instead, be asking what were doing to avoid turning Japanese. And the answer is, nothing. ..In short, fear of imaginary threats has prevented any effective response to the real danger facing our economy. “
His argument is that we can run up endless debt because of deflation due to a lack of recovery. “Borrow more, spend more, print more”. He thinks Greece's only problem is that they cant devalue their own currency to scew their debtors. Otherwise they are a success to him.
The stupidity of Krugman goes to the bone.
Paul Krugman,
FAKE Nobel Laureate
RE: FAKE Nobel Laureate
Oh, I can assure you it is genuine. The question then becomes what good is the genuine one ?
I did not know that. Good point.
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