Real World

IIRC, Krugman is one of those people that believes deficits don't matter.


Op-Ed Columnist

The Third Depression

By PAUL KRUGMAN
Published: June 27, 2010


Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.


Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.


Op-Ed Columnist - The Third Depression - NYTimes.com

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

patsfan13

Even Krugman realizes the jig is up, meanwhile the dems aren't going to work on the budget until AFTER the elections. They don't wnat the size of the defictibeing on voters minds come election time.


Same with the VAT they will try to pass and cap and trade.

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"Some guys play in all-star games, some guys don't. I don't know who picks all those all-star teams. In all honesty, I don't know who picks the combine, for that matter," Belichick said. "How does (Miami-Ohio offensive lineman Brandon) Brooks not get invited to the combine? How did Vollmer not get invited to the combine? I don't know. We can't really worry about that. We just have to try to evaluate them the best we can."

Wolfpack

Well we certainly seem to be headed in the general direction of a 3rd Depression, thanks to the economic policies of the Obama Adminstration. But hey, who cares if we stick our children and grandchildren with trillions and trillions of dollars of debt? Screw the little turds!

JackBauer

We were already in the 3rd Depression when Obama took office.

patsfan13

No we were in a recession. Do try to keep up.

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"Some guys play in all-star games, some guys don't. I don't know who picks all those all-star teams. In all honesty, I don't know who picks the combine, for that matter," Belichick said. "How does (Miami-Ohio offensive lineman Brandon) Brooks not get invited to the combine? How did Vollmer not get invited to the combine? I don't know. We can't really worry about that. We just have to try to evaluate them the best we can."

TBradyOwnsYou

But Obama is trying to spend and borrow our way out of it

JackBauer

Do you understand how recessions/depressions usually work?

Wolfpack

It's obvious he has a much better understanding of it than you do.

JackBauer

Well, since he has your endorsement, he's almost guaranteed to be wrong. It's like the Madden curse of the Political Discussion forum.

PatriotsReign

We're in this mess due to a credit boom that drove every facet of our economy. To believe that we can use borrowed money to get out of a spending binge is idiotic....nothing more, nothing less.

That's like saying an alcoholic can drink his way out of a drinking binge.

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"No one walking this earth knows what is truly righteous"