On Paul Krugman's Deficit Rationalization 14 comments
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An alcoholic is someone you don't like who drinks more than you do; a 'fun guy' is someone you like who drinks more than you do. The relativity is important to the degree that 'other things' are different. So, when Krugman notes that, in three years, our debt/GDP ratio will be comparable with other decent economies (Belgium and Italy), we have no worries. It is true that Debt/GDP does not have a strong correlation with GDP/capita, or something. Yet, like drinking too much, it's still not good to be adding 10% of your GDP to debt every year.
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All available options at present entail significant present or future potential problems; it’s essentially a matter of trying to choose from amongst them the one that can reasonably be expected to
1. require the least suffering now,
2. provide the best promise of maintaining reasonable stability to continue and recovery to begin and
3. limit major future problems that can’t be dodged by some intervening future actions.
That has been the box policy makers have been in at several points in time since the middle of 2008; at each stage there haven’t been cheap and easy choices available and they just had to try to do the best with what was available. So it is now.
Therefore, appreciating that deficit spending is simply a tool to be applied as appropriate and not a solution to the current economic malaise, what should now be done?
I am in no way bullish on the market - but come on! Dow will NEVER go over 11000?
How long have you been short the market? I feel bad for you - if you have been on the wrong side of the trade more than a few months. With interest rate at 0% - people don't have a choice but to speculate in the stock market and junk bonds. By the way I like junk bonds.. at 12% yield (JNK) I think there is still too much risk premium there.
2and20vision.wordpress.../
Take a look at what he said a year ago.
Take a look at where we are now.
Now read what he's saying.
I think there is a lot of "creep" in his statements on the economy. Check out his year ago statements on unemployment...
Look at bank lending -- the report just came out -- lowest on record. Look at what Krugman said last year about the TARP.
Oh! I'm not supposed to criticize his Majesty the No-Bell Prize winner? Tough! I know that people like Krugman through out our somewhat free-market economy long ago, but I'll be you know what if people like him dump our freedom of speech too! BTW: Try to say anything slightly critical of Krugman in the comments of his NYT blog... Won't get published...
On Nov 25 11:11 AM bobbybutte wrote:
> as a person who has become financially independent SOLELY from dividend
> investing and reinvested dividends let me add a few things
>
>
> Krugman is a good example of abad example
>
> If he actually understood how it all works he would be managing money
> not spewing his elitist nonsense
>
> It is really siimple america needs to cut all EXPENDITURES from government
> social security medicare everything by 20% except Miliatry salaries
> which should be raised 5%
> Combine that with cutting the lowest tax rate from 10 to 7% and low
> and behold everything is fine
>
> America knows what they need to do but does not have the will to
> do it
Krugman has been very consistent in his op-eds and his blog. His basic point, made a year ago and repeated many times since, is that the stimulus was never large enough. The point of the stimulus is that the discounted cost of the lost output due to the recession is much greater than the discounted cost of the stimulus itself. If you are a young college grad facing today's job market, which is preferable: stimulus spending today that provides jobs today to be paid for in higher taxes later, or NO JOB AT ALL FOR THE NEXT SEVERAL YEARS?
Further, he has been consistent in noting that we are in a liquidity trap and therefore monetary policy will not work, that TARP could not and, in fact, did not work to make the banks start lending again, and that we should have wiped out the stockholders by nationalizing the banks outright rather than socializing their loses via TARP.
Oh, and BTW, the NYT is a PRIVATE newspaper and not government owned. 1st Amendment doesn't apply to private speech. If your comments on his blog have been ignored, it is likely that it was because they are as incoherent and rude as the tripe you wrote below.
On Nov 25 04:30 PM bottoms-up wrote:
> Krugman?
>
> Take a look at what he said a year ago.
> I think there is a lot of "creep" in his statements on the economy.
> Check out his year ago statements on unemployment...
>
> Look at bank lending -- the report just came out -- lowest on record.
> Look at what Krugman said last year about the TARP.
>
> Oh! I'm not supposed to criticize his Majesty the No-Bell Prize
> winner? Tough! I know that people like Krugman through out our
> somewhat free-market economy long ago, but I'll be you know what
> if people like him dump our freedom of speech too! BTW: Try to say
> anything slightly critical of Krugman in the comments of his NYT
> blog... Won't get published...
Certain kinds of intelligence do not translate into trading brilliance. Ironically, the 20th century's greatest economist was a brilliant investor.
Who? John Maynard Keynes ... Increased Cambridge University's endowment by 1,000 percent during the 30s. A rather difficult investing climate ...
Eat your heart dividend investor ...
On Nov 25 11:11 AM bobbybutte wrote:
> as a person who has become financially independent SOLELY from dividend
> investing and reinvested dividends let me add a few things
>
>
> Krugman is a good example of abad example
>
> If he actually understood how it all works he would be managing money
> not spewing his elitist nonsense
>
> It is really siimple america needs to cut all EXPENDITURES from government
> social security medicare everything by 20% except Miliatry salaries
> which should be raised 5%
> Combine that with cutting the lowest tax rate from 10 to 7% and low
> and behold everything is fine
>
> America knows what they need to do but does not have the will to
> do it
Bottom line is that gub'mint spending needs a 40-50% cut across the board. We need to restore the "I" in the macro-economic equation of C+I+G-X at the expense of "G". Decades of runaway expansion of G under Dem's and Rep's have hollowed out our economy. We look like the late 80s Soviet Union.
On Nov 25 05:34 PM user396040 wrote:
> Sure - lets cut social security payments, IRS enforcement expenditures,
> the FBI budget, student loan support, funding for the NIH, funding
> for the National Academy of Sciences, the FEMA budget, the FDA budget,
> and move back into caves.
>
> On Nov 25 11:11 AM bobbybutte wrote:
On Nov 25 05:34 PM user396040 wrote:
> Sure - lets cut social security payments, IRS enforcement expenditures,
> the FBI budget, student loan support, funding for the NIH, funding
> for the National Academy of Sciences, the FEMA budget, the FDA budget,
> and move back into caves.
>
> On Nov 25 11:11 AM bobbybutte wrote:
You need to start taxing at sensible rates and stop the free lunches. Your system is loaded with tax subsidies for businesses that distort the allocation of resources. Many oil companies have gone years without paying any tax.
Your tax system is more generous to wealthy corporations than to poor households.
On Nov 26 10:59 AM raising4daughters wrote:
> We can't afford what we're spending on those programs.
>
> Bottom line is that gub'mint spending needs a 40-50% cut across the
> board. We need to restore the "I" in the macro-economic equation
> of C+I+G-X at the expense of "G". Decades of runaway expansion of
> G under Dem's and Rep's have hollowed out our economy. We look like
> the late 80s Soviet Union.
>
> On Nov 25 05:34 PM user396040 wrote:
On Nov 27 10:05 AM American in Paris wrote:
> To the contrary, the US has one of the lowest qualities of life in
> the developed world. Your country is totally dependent on cars to
> move people and your medical system is full of overpaid doctors and
> vendors. Your brand of capitalism makes people slaves to their jobs
> and their boss.
>
> You need to start taxing at sensible rates and stop the free lunches.
> Your system is loaded with tax subsidies for businesses that distort
> the allocation of resources. Many oil companies have gone years without
> paying any tax.
>
> Your tax system is more generous to wealthy corporations than to
> poor households.
On Nov 25 11:11 AM bobbybutte wrote:
> It is really siimple america needs to cut all EXPENDITURES from government
> social security medicare everything by 20% except Miliatry salaries which should be raised 5%