Good question. Here's your guy, Krugman, trying to now convince us all that up is down. He claims that what ails the economy is that we need MORE debt. What an unbelievable snake oil salesman. Does this guy have no shame?
What you left out of your post is his explanation for why he is taking that position
One answer is that issuing debt is a way to pay for useful things, and we should do more of that when the price is right. The United States suffers from obvious deficiencies in roads, rails, water systems and more; meanwhile, the federal government can borrow at historically low interest rates. So this is a very good time to be borrowing and investing in the future, and a very bad time for what has actually happened: an unprecedented decline in public construction spendingadjusted for population growth and inflation.
Beyond that, those very low interest rates are telling us something about what markets want. I’ve already mentioned that having at least some government debt outstanding helps the economy function better. How so? The answer, according to M.I.T.’s Ricardo Caballeroand others, is that the debt of stable, reliable governments provides “safe assets” that help investors manage risks, make transactions easier and avoid a destructive scramble for cash.
And what he says makes sense. You do understand that the Soviet Union fell because it was not maintaining its infrastructure and the plants and their equipment that manufacture products and the equipment that extracts natural resources more efficiently..........and not because jelly bean Reagan demanded they tear down the Berlin Wall. The SU had turned into a lumbering, inefficient Model T economy in a much more modern world, trying to maintain control over an empire it could no longer afford.
Well the US is heading down a similar road. We are not keeping up with our infrastructure......bridges, hi speed rail, highways, airports, train terminals, PO facilities, etc.....are not getting built and/or replaced. Through the misguided policies and ideology of your ilk this country started starving its gov'ts back in the 1980s under Reagan. Revenues have been reduced even as infrastructure is aging and needing replacement. You all have convinced a whole generation of Americans that that's a smart approach when its not. Its economic suicide. A major freeway bridge collapsed in MPLS......that shit usually doesn't happen in a first world nation. Seattle has an elevated freeway that has needed replacement for over 15 years but there was not the money to pay for it. Its pillars are slipping so every 4 months the state engineers inspect it to make sure its still safe. Again this shit isn't supposed to be happening in a first world nation. And sadly, these scenarios can be repeated throughout the nation
So what Krugman is saying gov'ts need to issue debt in order to pay for these badly infrastructure mainly because Rs will not let govt's collect the tax revenue that is needed. And what better time to issue such debt when interest rates are so low.
Truth is MM if you didn't think like a 6th grader when it comes to economic issues you would see why what he says makes very good sense.......in fact, its pretty brilliant.
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