New York Times - Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.
The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.
Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.
Sunday, July 31, 2011
Krugman we need to spend more money so the economy doesn't go further into a depression?
Image via WikipediaIn looking at this, I have to say what buffoon. Paul Krugman can't be serious, I mean how can these people write this and expect us to take them seriously? Our country is 14 trillion in debt and this clown thinks we need to redistribute wealth and spend more money. Ok, lets see if I understand this, I am broke, my credit card is maxed out and I need a credit line increase so I can spend even more money? Yeah, I am pretty sure I would get an "F" if I wrote a term paper in an economics lab and used that theory.