Steve, I suspect one could scour Krugman's writings for something on the deficit. But, whatever it was, it would be dramatically different from Friedman and/or Hayek et al. Vastly different schools of economics.
It's my understanding of Krugman's arguments, and here I'm repeating myself, that the deficit is extremely likely to grow a great deal worse if we do nothing than if we throw the kitchen sink at the economy right now. Too much, he says often, is way better than too little.
So, if you worry about the deficit and you give any credence to Krugman, you say to Obama something like "pour it on."
My own, somewhat folksy, take on all the talk is that since demand is drying up and if demand dries up further more jobs are lost, more banks are in crisis, more unemployment insurance is needed, more food stamps are needed, more governments lay off workers, more libraries close, etc. etc., then one needs to find some place to kick start demand. And there it is, your friendly US Govt.
A catastrophe all gratis GWB and his buddies.
For those, like yourself, who worry a great deal about how much their grandkids will have to pay to draw down the deficit, I agree. It's just that, if Krugman is right, the best chance for them to have some resources to do that is to spend and spend right now. I know, a bit dramatic. But there it is.
As for those who argue that we just have to take the pain now and bear it, I don't think they understand the character of negative spirals. Very, very hard to stop. I just hope they are kept well away from the levers of power. They had their shot and look where it got us. |
