Paul Krugman Answers Paul Ryan on Debt Crisis: We Can Print Money

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[Sub-Driver]

Paul Krugman Answers Paul Ryan on Debt Crisis: We Can Print Money January 31, 2013 By Melanie Hunter

(CNSNews.com) – Responding to House Budget Chairman Paul Ryan's warning that if the federal government continues to run annual $1 trillion deficits we will eventually face a debt crisis, liberal economist and New York Times columnist Paul Krugman said Wednesday that that is not a legitimate worry because the U.S. government can always print money and weaken the buying power of the dollar.

Weakening the dollar, Krugman said, would be a good thing.

“The United States is a country that has its own currency--can’t run out of cash because we print the money. If you even try to think what would happen--suppose that investors get down on the United States. Even so, that would weaken the dollar, not send interest rates soaring, and that would be good. That would help our exports,” Krugman said on C-SPAN’s “Newsmakers.”

Krugman was asked whether he thought the U.S. was “in danger of a collapse, a stall, a crisis.”

“No, there’s a whole bunch of reasons why that’s not true. First of all ... that trillion dollar deficit is overwhelmingly the result of a depressed economy, and when the economy’s depressed, it’s good to run a deficit. You don’t want the government to try and balance its budget right now,” Krugman said.

C-SPAN showed a video of former GOP vice presidential candidate Rep. Paul Ryan (R-Wis.), speaking at the National Review Institute in Washington, D.C., on dangers of debt.

[MrB]

Part of a quote from Keynes:
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. “

There’s no indication within the whole quote as to whether he thought this was a “good thing” or a “bad thing” though.

[Hoodat]

When it comes to economics, I didn’t think it possible to find someone dumber than Larry Summers. Paul Krugman has proved me wrong.

[griswold3]

You can pay me now or pay me later, so sayeth Big Government. I’m so glad the young that voted for our current catastrophe will be the ones paying for this. I am making other arrangements, bags packed behind the door, and passport in hand. It may not be greener pastures on the other side but I simply cannot bear to watch this deterioration first hand.

[KC_Lion]

How about Coolidge advice instead, Krugman you asshat.

http://www.youtube.com/watch?v=5puwTrLRhmw

[windsorknot]

Paul Krugman is a highly regarded “economist”. The same people who admire Krugman are the same people that helped reelect the radical, collectivist president for a second term. For them the best economy is centrally planned by an all-powerful, imperial federal government.

[jpsb]

"can’t run out of cash because we print the money

Yipee! Free money, what could possibly go wrong? /s

[adorno]

...not a legitimate worry because the U.S. government can always print money and weaken the buying power of the dollar

Krugman may be onto something here.

If the government can print all the money it wishes or needs, then, logically, it can print all the money necessary to pay off the national debt, and the country can start from scratch. Then, all of the deficits and national debts, won't ever be a worry again.

Where are those trillion dollar coins? We need them now, and as many as necessary.

[marron]

If Krugman is right why are we paying taxes?

Exactly. If they are willing to do this, and they clearly are, then there is no reason to levy taxes. Print the money you need to operate government. The cost will be defused across the entire dollar-using world.

[adorno]

If Krugman is right why are we paying taxes?

I keep thinking and saying the same thing.

If what the government spends is not tied to the performance of the economy, then, the economy of government can be completely divorced and separated from the private sector. Which then means that, collecting taxes won't matter at all, and the free economic system can work without having to worry about the government sector, and no taxes or fees whatsoever.

[Travis McGee]

The USSR could print its own money too.

How did that work out for the former superpower?

[CowboyJay]

"Exactly. If they are willing to do this, and they clearly are, then there is no reason to levy taxes. Print the money you need to operate government. The cost will be defused across the entire dollar-using world.

They levy taxes to manufacture demand for the FRN. It's part of how they keep the dollar positioned as 'the coin of the realm'. Taxes are paid in dollars, so people need to come up with dollars to pay them. Keeps them from wandering off the dollar plantation.