Quote:
Originally Posted by sebastian_dangerfield
Indeed. "We need to spend until the thing rights itself" is brilliant policy.
I get it. Austerity is illogical. I understand and can run with the argument for a while.
But then it gets absurd. The market sees through it. Businesses and the market become dependent upon, and learn how to predict, and goose, government intervention.
At a certain point, you have to start weaning the economy from interventions. All Krugman screams is "More, more, more." Suppose we hand the economy what he suggests. Perhaps there's an argument to be made that a monster stimulus from the start, with no set end date, or limit, would work because the actors in the system would never know when, if ever, it would end. Maybe that would work. But that's politically, and practically, impossible. All we can do is offer a one new fix after another. Stimulus, QEs, twist, refi programs. Everyone sees through, and anticipates the next govt move. The markets demand it. It becomes a pusher/junkie scenario, which undoes all the intent of the underlying policy prescription.
So fuck Krugman. His advice is for a day long past. It's as bad as severe austerity. The answer is what the answer will be: Muddle through. React, to keep a status quo that avoids widespread civil unrest, and let the debt overhang unwind as it will.
It won't be a terrible shit sandwich. When all falls, the guy on top at the outset of collapse holds that position. And you can forget all the shmucks claiming the BRICs would decouple. That's been disproven. We all fall together... And that's good for us.
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Yeah, like 2009, when he was warning that Obama's half-assed "stimulus" plan, consisting of mostly tax cuts, was a recipe for a double-dip recession. He got no love back then either.
The idea that we need to pay off the national debt RIGHT NOW, at the expense of jobs in the public and private sectors, and without even considering raising taxes, is complete madness, and you don't need to think particularly highly of Paul Krugman to reach that conclusion. But that's the hymn sheet the Democrats are (mostly) singing from right now, so I guess we'll continue down this road until unemployment is at 15%.
