Krugaman Deficit Scare is Largely GOP Political Tactic

It flew over your head. Krugman says the spending is neccessary in a recession, not during an expansion like 2003.

 

I did some quick checking and the EU has around 10 trillion $$ in debt - over 60 percent of total GDP. Somethings got to give.

I wonder what individual Amercian state's numbers are but they certainly can't be rosy either.

 

No, it isn't as simple as that, which is the point the article makes clearly.

 

Strawman.

Deficits do matter, but they have to be viewed in context.

 

Krugman is a Keynesian and Keynes was a dumbass. A popular dumbass who told people what they wanted to hear, but a dumbass nevertheless. Just because the Chicago school doesn't have a good response to them doesn't mean the Keynesians are right. In the long run their economic theory is dead.

Krugman thought the housing bubble was a good idea and then lied that he never took that position when it all came bursting down around us.

Krugman and people who subscribe to his economic philosophy are the very same people who brought this fiasco on in the first place. And now you turn to them for a way out? (we didn't get into the position we are today because we were good at saving as a country).

The markets aren't responding to real threats facing this nation because of all the financial manipulations currently going on in the treasury and the Fed. The markets are too busy getting all the big banks rich with newly created money. The markets didn't respond to the housing market burst until it happened either. By the time the markets reacts, it's already too late.

Krugman is little more than another political hack who disguises his politics in economic terms.

 

The expansion in 2003 was caused by low interest rates to get us out of the depression of 2001-2002.......IE doing exactly what Krugman wanted them to do...SPEND. Spending during the recession caused the market to become distorted during the boom and brought on the very problem of malinvestment he is suggesting we use spending to correct.

 

the "depression" of 01-02, not quite dude

 

my bad: The "recession" was from March 2001-November 2001: 8 months


http://en.wikipedia.org/wiki/Recession#United_States_recessions

 

technically we aren't in a "recession" now either. The economy is really awesome!

 

This is true. I've been worried about the deficit for a while now. Retiring boomers, smaller domestic receipts, our entrenched military industrial complex, and runaway interest payments all factor into it. He's right that it's being magnified by politics, which harkens to the frame that Republicans are supposedly "fiscally" conservative and "strong" on defense. Republicans are more no-tax conservatives than fiscal conservatives...

Krugman's article is disingenuous, but it's not as bad as the magical rise of Tea Partiers and the Coincidental hysteria that fomenteed it. The Professor seems to like getting deep into the mud to prove a point.

 

Exactly.

Deficit spending by government in an economic crisis helps us survive the crisis and helps dig us out of the crisis. The economic theory is that once the turnaround happens, surpluses will allow us to get the overall budget back on track.

The problem that nobody wants to talk about is that at some level of deficit, it simply becomes to large to deal with over the long haul. If the $1.3 trillion deficit number is true (I have no idea...I haven't looked at it and don't know), that with the large debt we are already carrying scares me.

 

This is not really an accurate comparison at all. Could the wealthy man decide to make more money than he is currently making whenever he wants to? No. Of course not. The government can take in more money if Congress raises taxes. Also the risk business man would soon find it difficult to get a loan. The government on the other hand has no such problem. You are really comparing apples to oranges.

Here's a great explanation on why deficit spending is so important during a financial crisis.