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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (139867)	6/28/2010 2:28:08 PM
From: Dale Baker	Read Replies (1) \| Respond to of 541990

Once again, Krugman utterly ignores all questions of solvency and support for the currency, the rational arguments in favor of current European policies. Hence he finds them "irrational" because he simply assumes solvency (like a good economist) and throws out any motives that don't suit his argument. But we argued this before so I won't repeat myself more than once.

To: JohnM who wrote (139867)	6/28/2010 3:10:55 PM
From: Steve Lokness	Read Replies (2) \| Respond to of 541990

John; And here's Krugman arguing we are heading deeper into a serious "depression." Krugman seems to be missing the intent of the fed for some time now - that is that they have been juicing the economy in every way imaginable. Have you looked at CD rates lately? Why do you think they are so low? Could it be that demand for money is not there? Krugman may be right (not sure I buy it though) that we are heading deeper into a depression, but we have had stimulus after stimulus after stimulus and still the economy doesn't turn around. AND of course the debt just continues to build. And so now he wants more of the same that hasn't improved a thing. The one explanation that explains this is the natural cycling of the economy as predicted by some of the Austrian thinkers. We just need to decrease the inefficiencies that have built up in the economy and that just takes time. We have all seen these inefficiencies all around us. A perfect example is my neighbor who used his house like an ATM machine to buy up commercial properties like they were poker chips. Now there is no way in hell he can pay the bills and so he must sell. To suggest we must crank up the stimulus machine so he can be bailed out of his recklessness is just absurd - because the inefficiencies will then remain in place. The bank now wants to do a short sale on his house and yes he will lose it. But no amount of stimulating in the world will prevent this because the supply went way over the demand. Steve

To: JohnM who wrote (139867)	6/28/2010 3:31:54 PM
From: Katelew	Read Replies (1) \| Respond to of 541990

I'm worried about deflation and a possible depression of sorts, too. However, I don't share Krugman's belief that more Keynesian style government spending will automatically forestall it. Krugman possibly should review his reading on the Great Depression before he pontificates further. The Great Depression was preceded by a huge buildup of credit, overspending, and debt (both public and private), and a collapse into indebtedness.....just like now. The Keynesian spending came later, years after the debt bubble burst. There was no system of unemployment insurance to cushion workers, so the government stepped in. Krugman seems to think that deficit spending right now will forestall something, when in reality it is just setting the stage for a possible depression by adding to the build-up of credit. It seems to me Krugman has his timeline wrong.