Krugman: The Downgrade Doom Loop...Behold the power of a stupid narrative

[ProSense]

The Downgrade Doom Loop

It’s not the whole story, but something like this threatens to develop:

1. US debt is downgraded, sparking demands for more ill-advised fiscal austerity

2. Fears that this austerity will depress the economy send stocks down

<...>

4. This leads to calls for even more ill-advised austerity, which sends us back to #2

Behold the power of a stupid narrative, which seems impervious to evidence.

[Unvanguard]

1. Krugman is absolutely right, as usual. n/t

[The_Casual_Observer]

2. There is guaranteed austerity with the depression that's on it's way

due to those stupid bastards.