Krugman: Deficit hysteria (scaring the government into inaction on unemployment)

[Kurt_and_Hunter]

Paul Krugman November 23, 2009, 3:24 am

Deficit hysteria

Urg. Big piece on the front page saying that, on the one hand, some people say that we’re going to have a debt crisis any day now, while on the other hand … well, actually we never hear from the other side.

As Dean says the numbers don’t fit the scare story — a decade from now interest payments will reach a level not seen since … 1992. And the market seems unworried, since long-term rates remain low.

But aren’t people like me just like the people who said “don’t worry, be happy” about house prices? Well, I could of course be wrong. But the situations are very different. In 2005 the conventional wisdom was that house prices made sense despite the fact that the numbers screamed “bubble”. Today, the conventional wisdom is that bond prices don’t make sense despite numbers that actually look reasonable.

And isn’t there something weird about a conventional wisdom that’s at odds with market prices? Someone isn’t putting their money where their mouth is.

This suggests that James Kwak is right: a lot of this is about scaring the government into inaction on unemployment.


http://krugman.blogs.nytimes.com/2009/11/23/deficit-hysteria/

[high density]

1. I heard nothing about the deficit and debt during the Bush years

Just nothing but bliss for tax cuts for the rich and a massive war machine.

Now that a Democrat is signing the spending bills the media has a new outlook on the debt.

Also I'm sure that the cable news shows are not going to call up Krugman to talk about this, unlike how his phone must have been ringing of the hook earlier this year when he was at odds with the Obama admin.

[Kurt_and_Hunter]

2. And also now that there is a very good reason for deficit spending

It's incredibly perverse... the hysteria swells at precisely the point deficit spending is most vital to the health of the economy--so vital that it swamps the downside.

Its like a suicide cult -- there was no point in protesting Bush's deficits because curtailing them would not have destroyed the nation. But now we have a chance to really fuck up the world. Hooray!

We must never forget that McCain ran on fixing the economy by freezing government spending during an incipient depression.

[fascisthunter]

3. if they REALLY CARED about Deficits, They'd pull out of Iraq and Afghanistan

they screw us here, just to funnel our dollars over there. They don't give a shit about deficits.

[vaberella]

4. Krugman...instead of sitting on the sidelines and talking and warning.

Just join the political structure and try to change the path America is going---because more and more you annoy me like the many hot/cold bloggers out there.

For those who think I'm hating on Krugman....I'm not. I studied Economics and I can tell you----Economics credible or not base EVERYTHING on assumptions and conjecture. Why? Because the economy can blow hot or cold depending on what's going on----similr to the stock market. Yes, there can be paths that lead to certain things--but let's be aware that hindsight is everything. Especially when it comes to Economics. I don't want to sound unfair but I find Economist who deal on hypothetical situations like Nostradamus. When we look back on any one of their statements then we think they were right all along. However, if nothing happened, we'd be like whatever with their statement. Krugman especialy to me is like one of those people who stands on the sidelines and doesn't get into the political process to TRY to make changes but stays on the sidelines intentionally to make claims and to shout, "I told you so." But never wanting to hold responsibility, just in case at times. Sure it's a cold statement and I'm sure many here will say I'm drinking kool-aid but this is beyond politics and just a person who studied econ for years and knows the many voices that shout at the same time wanting to be heard in the melee of everyone else.


One minutes grudging praise for some success in the Obama admin for the econ and now he's talking about scare tactics...whatever. I'm waiting for him to run for Congressman or Senate, or at least work in a political admin.

[Nicholas D Wolfwood]

6. He's admitted explicitly that he's not cut out for practicing politics.

So why he insists on talking about something that he knows he can't do and has no tolerance for is very, very beyond me....
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Oh wait, he makes a boatload of cash doing it and gets to inflate his own ego. Now it makes sense...

[vaberella]

7. +10.

Sorry for a bit of confusion on my post. I didn't realize it was so disjuncted. I just noticed that Economists like to base all things on conjecture and hypothetical sitations. In Krugman's case----he's most definitely about ego and it's a bit unnerving.

[Bitwit1234]

5. Republicans with the help of the republican owned media

kept those type of stories out of the MSM. They know this type of thing frightens real Americans so they are whipping it to a frenzy. If they ever get in again, we will be so damn far in debt this country will go under.