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U.S. Still Suffering Depression Conditions: Paul Krugman


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#1 concert andy

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Posted 29 January 2013 - 03:57 PM

U.S. Still Suffering Depression Conditions: Paul Krugman

 

 

When Federal Reserve officials sit down today for their first policy-making meeting of the year they should consider continuing easy monetary policy well into 2015, says Nobel prize-winning economist Paul Krugman.
 
“If the Fed can convince people that it‘s going to keep the pedal to the metal…that still has some leverage on the economy,” Krugman tells The Daily Ticker.
 
The Fed had been saying it would maintain near-zero low rates until mid-2015, and then until unemployment falls to 6.5% or below, but recently some Fed officials have suggested that the Fed may consider slowing or ending its asset purchases (quantitative easing) sooner than later.
 
Related: Don't Be on Fed 'Exit' in 2013...or Even 2014: Alan Blinder
 
The economy now needs all the help it can get, says Krugman, author of End This Depression Now!whose paperback edition has just been released with a new preface.
 
“The U.S. economy is recovering but slowly,” and still experiencing “depression conditions,” says Krugman. “Almost four million workers have been out of work for more than a year…we haven’t had anything like that since the ‘30s” [and]… there’s lots of unused capacity…a lot of savings that have nowhere to go.”
 
Krugman’s solution: More government spending, not less, in order to grow the economy. “A growing economy is the best solution to all our problems,” says Krugman, also an economics professor at Princeton University.
 
Krugman is not concerned that more government spending will lead to bigger deficits. “There is no good reason dealing with debt should be a priority today,” says Krugman, and “the 10-year outlook for debt [in the U.S.] is not too bad.”
 
Even a little more inflation in the U.S.--say 3 or 4%-- could be helpful, Krugman says,
 
For starters, he suggests that the federal government reverse state and local budget cuts in infrastructure and education. “Just undoing that would lead a long way back to full employment. It is in fact that easy,” says Krugman.
 
Related: U.S. Economy Stuck in Second Gear: David Levy
 
Critics disagree and argue that this is not the time to add to a budget deficit, when the debt-to-GDP ratio currently tops 100% of GDP.
 
Krugman’s response: Japan is much more in debt than the U.S. (its debt-to-GDP ratio near 200%) but has now instituted an expansion of fiscal and monetary policy.
 
“Markets are not punishing [Japan],” says Krugman. "Markets are rewarding them."


#2 TakeAStepBack

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Posted 29 January 2013 - 04:03 PM

He should stick to trade theories and leave Macro to people who don't have their head all the way up Keynes ass.



#3 concert andy

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Posted 29 January 2013 - 04:14 PM

He should stick to trade theories and leave Macro to people who don't have their head all the way up Keynes ass.

 

 

That is why I highlighted or bolded those sections.  In theory that works nicely, here in the real world, that is absurd.



#4 hoagie

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Posted 29 January 2013 - 04:16 PM

Maybe someone can explain how going deeper into debt is supposed to get me a better job? I def do not understand...

#5 TakeAStepBack

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Posted 29 January 2013 - 04:18 PM

That is why I highlighted or bolded those sections.  In theory that works nicely, here in the real world, that is absurd.

 

I hear you. The problem is that people actually listen to this fool (not saying you), but i saw him this morning basically re-iterating this same nonsense on TV over his new book. It's sad, frightening and makes me angry that people listen to this guy just because he has a Nobel. He got it from trade theories, not Macro Econ. Nobel Macro econ winners completely disagree with this man, because he's full of shit.



#6 TakeAStepBack

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Posted 29 January 2013 - 04:26 PM

Maybe someone can explain how going deeper into debt is supposed to get me a better job? I def do not understand...

 

In theory, the money would be spent to add new jobs in the public sector (not the privaate). The problem is that, it generally is squandered and it's not a long term fix to the eonomy. Krugman seems to be living in the illusion that the government IS the economy. It isn't. The economy is first and for most the private sector. Without private industry, the government has no money to extract in order to provide public programs. Currently the government is running debt/deficit ratios exceeding 100% of GDP. So he's more or less a clown that should be publically shunned and made to go work in a remote dungeon in Poland.



#7 Tim the Beek

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Posted 29 January 2013 - 04:28 PM

Even a little more inflation in the U.S.--say 3 or 4%-- could be helpful, Krugman says

 

Yeah, PK! Let's further screw the people who have saved diligently all of their lives, who are already getting fucked by the Fed with artificially low interest rates.

 

:Phishfolk:



#8 concert andy

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Posted 29 January 2013 - 04:29 PM

In theory, the money would be spent to add new jobs in the public sector (not the privaate). The problem is that, it generally is squandered and it's not a long term fix tot he eonomy. Krugman seems to be living in the illusion that the government IS the economy. It isn't. The economy is first and for most the private sector. Without private industry, the government has no money to extract in order to provide public programs. Curently the government is running debt/deficit ratios exceeding 100% of GDP. So he's more or less a clown that should be publically shunned and made to go work in a remote dungeon in Poland.

 

I agree to an extent.

 

I will add the theory part in layman terms (or try).

 

If we have 1% unemployment.  That means there is more money being paid to government in taxes, which will help pay down the debt.

 

Meaning spend today, and the tax payer will get us back long term.

 

Isn't that how we got into this mess?  Overspending and over extending?



#9 concert andy

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Posted 29 January 2013 - 04:30 PM

Yeah, PK! Let's further screw the people who have saved diligently all of their lives, who are already getting fucked by the Fed with artificially low interest rates.

 

:Phishfolk:

 

Devil's advocate:

 

The needs of many out weigh the needs of one.

 

:facepalm:



#10 TakeAStepBack

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Posted 29 January 2013 - 04:33 PM

Isn't that how we got into this mess?  Overspending and over extending?

 

Yes. Because the whole, spend what we dont have today and pay it back tomorrow doesn't work. With Govt., tomorrow never comes. It's always more spending. So while Krugman's theory sounds all nice and neat, in reality it's a bunch of foolish nonsense.
 



#11 Tim the Beek

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Posted 29 January 2013 - 04:40 PM

Devil's advocate:

 

The needs of many out weigh the needs of one.

 

:picardfp:

 

I wanna be the chair of an Obamacare Death Panel. :funny1:



#12 TakeAStepBack

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Posted 29 January 2013 - 04:42 PM

Devil's advocate:

 

The needs of many out weigh the needs of one.

 

:picardfp:

 

Devils advocate, devils advocate.

 

Price inflations hurt everyone. Including the people you're trying to help. So it is the needs of many vs. one.



#13 concert andy

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Posted 29 January 2013 - 04:43 PM


I wanna be the chair of an Obamacare Death Panel. :funny1:

 

Can I be on the panel for the government perks?



#14 Tim the Beek

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Posted 29 January 2013 - 04:46 PM

Perks and Recreation?



#15 TakeAStepBack

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Posted 05 February 2013 - 07:28 PM

http://weaselzippers...how-we-do-this/

 

wzlogo-new.png

Krugman On How To Pay For Entitlement Programs: “Death Panels And Sales Taxes Is How We Do This”…

 

 

Eventually we do have a problem. That the population is getting older, health care costs are rising…there is this question of how we’re going to pay for the programs. The year 2025, the year 2030, something is going to have to give…. …. We’re going to need more revenue…Surely it will require some sort of middle class taxes as well.. We won’t be able to pay for the kind of government the society will want without some increase in taxes… on the middle class, maybe a value added tax…And we’re also going to have to make decisions about health care, doc pay for health care that has no demonstrated medical benefits . So the snarky version…which I shouldn’t even say because it will get me in trouble is death panels and sales taxes is how we do this.