I wanted to post the following. I like Paul Krugman and think he is a reasoned and well grounded in actual systems theory.
What theory do you believe in? Krugman's theory is deeply rooted in Keynesian philosophy and is questionable on the macro level of economics. As a
solid question, with the Feds and the Government pumping money into the Government, shouldn't their theories be producing the glorious results they
claim they would?!
The Fed is propping up the NYSE, giving a sense of stability, along with our constant and insanely high expenditures on underfunded programs to give a
sense that it is all "okay". Austerity must happen, regardless of what Professor Krugman claims otherwise.
You I will answer, the rest of the replies are just so much rubbish. The effort is appreciated but, IMO, so much wasted energy.
Ownbestenemy. Your post is worthy of a considered response.
Krugman is a Nobel Prize winning economist who also writes in the area of politics and has for years. Yes he leans in the direction of so called
Keynesian Economic Philisophy. Keynesian Economics is a valid as the Chicago school. In fact I believe it is much more based in real life then the
more magic market Chicago school.
You are missing the point the 'Feds pumping Money' into the Government is not the issue here and do recall that the Federal Reservse LOANS money to
the government at interest which we the Taxpayers have to pay. It is in the interest of the FED to keep the debt high. That is what Mr. Krugman
refers to about the 'deficiet falling too fast'.
From a reality based viewpoint. He is talking about stimulus programs and the government directly pumping money into the 'main street' to
'kickstart' the economy thereby raising government revenues with which to SERVICE the DEBT. The more people working, at good jobs, the higher the
tax base - it's a reinforcing loop. If you cut services and jobs and sell off assests (sound familiar?) it SERVICES the DEBT for only a short while
then you have to cut more, sell off more and it's another reinforicing loop but one that leads to bankrupcy and desolution.
It's not about the Debt - It's about whether you want to pay the interest and pricipal in a sustainable cycle or just pay it off for now but have
nothing left and nothing to show for it.
It's bad business - the FED, the Wealthy - none of them want the DEBT to go away - they just want their interest payments to keep coming in. The
only, only way to do so in an ongoing way is to put people to work and raise government revenues. The other way - austerity - is just stealing from
the people, all the people.
It worked for FDR - the new deal was/is a huge success. The CCC, WPA and other government stimulus plans built infrastructure all over the country
that still serves us to this day (all that hasn't been sold off to private business).
The GOP - say's WWII brought us out of the depression but research (and I don't have it at hand, but will look for it when I get home) shows that we
were well on our way back to a healthy economy before even Lend/Lease began.
Austerity is too short sighted. It's the old 'take the money', don't look back and run. Leaving the 'poor suckers' to starve and die. If
that's what you want for yourself, your kids and grand kids, go for it. Me, I want a STABLE world for my daughter, don't need her to be rich, just
not scared all the time. The GOP wants us SCARED and DOCILE all the time.