Paul Krugman is a jackass (2 Viewers)

[SacramentoBob]

If government employment had grown as fast under Obama as it did under Bush, we’d have a million and a half more people employed right now — directly.

I thought the 8 Bush years were a mistake.

I sure don't think we need to copy him and add a bunch more DHS/NSA jobs...

Somewhere, there's a brass cannon that needs polishing.

I thought that was Clinton's jobs program?

 

[Topes]

Sen. Rand Paul slams ‘allegedly smart’ Krugman for ‘disingenuous’ statistics

 

[Arsenal of Doom]

This blog post made me crack up a few times:

Misinformed Monetary Mitt

Leave aside what the now-famous video tells us about Mitt Romney's character; in a way the shocking thing is how uninformed he seems to be. The 47 percent number was the kind of thing you hear in yahoo forums like talk radio and the Wall Street Journal editorial page; and then there's what he said about US debt.

Kevin Drum makes the catch:

[A]s soon as the Fed stops buying all the debt that we're issuing-which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money.

Has the Fed been buying anything like three-quarters of the debt that we're issuing? Here's a comparison between two numbers: the increase in the value of federal debt held by the public (which in this case includes the Fed), and the increase in Fed holdings of federal debt, in each case measured over the previous year:So there was a period when the Fed was buying a large fraction of federal debt issue -- but it didn't last long. Many people did believe that terrible things would happen when the Fed stopped -- among them Bill Gross. And you know what? They lost a lot of money, because the Fed bond purchases came to an end but interest rates kept going down:

And yes, I called this one right. But that's not crucial here. What is crucial is that a sort of urban legend developed that the only thing keeping rates low was the Fed; this legend was proved wrong by events; but Mitt Romney still believes it.

And why does he believe it? Because he talked to some guy.

Look, Romney is a presidential candidate. He has a staff, and some prominent economists allegedly advising him. Yet he draws his stories about the economy from what he heard somewhere, apparently believing that if the right sort of person says something there's no need to check it out.

Awesome.

 

[joetrow]

My link

Quite a gem from the Krugmeister.

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.

Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

 

[Slapdash]

My link

Quite a gem from the Krugmeister.

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.

Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

The last line is pretty wacky, but the rest is spot on.

 

[humpback]

My link

Quite a gem from the Krugmeister.

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.

Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

The last line is pretty wacky, but the rest is spot on.

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

 

[Slapdash]

My link

Quite a gem from the Krugmeister.

Youve heard the story many times: Supposedly, any day now investors will lose faith in Americas ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because its roughly speaking what happened to Greece. But were not Greece, and its almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally cant run out of money. After all, it can print the stuff. So theres almost no risk that America will default on its debt Id say no risk at all if it werent for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, wont that lead to inflation? No, not if the economy is still depressed.

Now, its true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

The last line is pretty wacky, but the rest is spot on.

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

 

[Socrates11]

If printing money doesn't matter according to Krugman, how do I go about getting the Treasury to print me up some? I don't want to seem greedy, about 100 million should do it. I'll stimulate the #### out of the economy.

 

[Dinsy Ejotuz]

My link

Quite a gem from the Krugmeister.

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.

Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

The last line is pretty wacky, but the rest is spot on.

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I don't know anyone who's in the deficits don't matter camp. There's just disagreement about how much and how long it takes before they matter a lot.IMO Krugman has been pretty much proved right in a real time experiment from 2008-2012 about what happens in a ZIRP environment, including the effects of austerity.

He seems very confident that increasing deficits can go on a long time. I'm less sure of that mostly because I don't think Krugman has been compelling at all in his explanations for gold's rise. The times he's written about it he seems like he's flailing for answers.

For my money (literally -- I bought in 2007) gold's rise is a long-term indicator of people losing confidence in fiat currencies generally. It started after the LTCM and Asian crises in 1999, give or take, and it's continued in fits and starts ever since as the world's central bankers have sporadically opened up the spigots (US stock bubble bursting, US housing bubble bursting, Euro debt crisis).

But the dollar benefits from being less bad than the Euro and has the advantage of being the world's currency reserve too -- which means its held in insanely large quantities by a bunch of other countries. Which in turn means they have little incentive to see the value of the dollar go to hell.

So eventually there's a price to pay, and we'll pay it one way or another, but for now we muddle along. I think this is the sort of thing John Maynard Keynes was talking about when he said 'markets can stay irrational longer than you can stay solvent.'

 

[humpback]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

 

[RCon]

I don't know anyone who's in the deficits don't matter camp. There's just disagreement about how much and how long it takes before they matter a lot.IMO Krugman has been pretty much proved right in a real time experiment from 2008-2012 about what happens in a ZIRP environment, including the effects of austerity.

I disagree that Krugman has been proved right, due to two factors.1) We haven't actually tried austerity, so I don't think anyone has been proven right or wrong regarding its effects.2) Most of those arguing for austerity are suggesting that it may be harmful in the short term but beneficial in the long term. Since we have yet to experience the long term, no one has yet been proven right or wrong regarding the effects of any policy over the long term.

 

[Anthony Borbely]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I don't think it's the level as much as when it is dealt with.

 

[humpback]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I don't think it's the level as much as when it is dealt with.

Again, seems like a cop-out answer, especially if the rationale is "we can just print our way out of it". If that's the case, why do deficits ever matter?

 

[Anthony Borbely]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I don't think it's the level as much as when it is dealt with.

Again, seems like a cop-out answer, especially if the rationale is "we can just print our way out of it". If that's the case, why do deficits ever matter?

It's not a cop out answer. I think it has to be addressed, but I think you attack this problem when times are better, not now.

 

[humpback]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I don't think it's the level as much as when it is dealt with.

Again, seems like a cop-out answer, especially if the rationale is "we can just print our way out of it". If that's the case, why do deficits ever matter?

It's not a cop out answer. I think it has to be addressed, but I think you attack this problem when times are better, not now.

Again, I don't necessarily disagree, but it's a cop-out because there are zero specifics. It's the same reasoning why we'll never address the problem seriously, because it's never the "right" time.If it all comes down to printing, why would it really matter how much we had to print?

 

[Slapdash]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I see what you're saying but there is no hard number that we know how the market will react to. In a lot of ways, the modern international monetary arrangement is in uncharted waters. We don't really have a lot of examples where countries have large debt loads in a currency they print to meet larger macro-economic goals and is priced based on international derivative contracts. Japan is the rule of thumb to take and I would think Japan would have had problems already (attributable to their large debt load), but they really haven't. The private sector continues to buy their debt and hasn't lost confidence in it. I don't know what it will take for the market to lose its confidence; I wouldn't want to press my luck and find out.

There is an alternate theory though that the debt level really doesn't matter at all (see MMT). That the shadow banking sector is so large and so dependent on using "safe assets" like Treasuries as collateral for Repo that the level of debt will never matter as long as the country that issues it can always issue more to meet the obligations. We know shadow banking is seemingly impossibly large and much more integral to money creation that commonly assumed. Broker dealers, money funds, traditional banks, and insurance companies just can't get enough of these safe assets. Here, safe assets are a necessary underpinning of the modern financial system and it is essential to keep it growing in nominal terms. Even worse, we need to grow it rapidly to make up for the loss of other safe assets like private label MBS and Eurobonds in the eyes of the market. I am uncomfortable with how well this theory fits the evidence over the last few years.

 

[Dinsy Ejotuz]

I don't know anyone who's in the deficits don't matter camp. There's just disagreement about how much and how long it takes before they matter a lot.IMO Krugman has been pretty much proved right in a real time experiment from 2008-2012 about what happens in a ZIRP environment, including the effects of austerity.

I disagree that Krugman has been proved right, due to two factors.1) We haven't actually tried austerity, so I don't think anyone has been proven right or wrong regarding its effects.2) Most of those arguing for austerity are suggesting that it may be harmful in the short term but beneficial in the long term. Since we have yet to experience the long term, no one has yet been proven right or wrong regarding the effects of any policy over the long term.

There are other countries which have implemented austerity. The results are pretty unambiguous.There are also a handful of previous instances when this austerity became self-reinforcing -- where the situation actually gets worse the more austerity you apply. The Great Depression for example. Only via an inflationary devaluing of the dollar (1934) and then the massive stimulus of WWII did we escape the deflation.

 

[humpback]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I see what you're saying but there is no hard number that we know how the market will react to. In a lot of ways, the modern international monetary arrangement is in uncharted waters. We don't really have a lot of examples where countries have large debt loads in a currency they print to meet larger macro-economic goals and is priced based on international derivative contracts. Japan is the rule of thumb to take and I would think Japan would have had problems already (attributable to their large debt load), but they really haven't. The private sector continues to buy their debt and hasn't lost confidence in it. I don't know what it will take for the market to lose its confidence; I wouldn't want to press my luck and find out.

There is an alternate theory though that the debt level really doesn't matter at all (see MMT). That the shadow banking sector is so large and so dependent on using "safe assets" like Treasuries as collateral for Repo that the level of debt will never matter as long as the country that issues it can always issue more to meet the obligations. We know shadow banking is seemingly impossibly large and much more integral to money creation that commonly assumed. Broker dealers, money funds, traditional banks, and insurance companies just can't get enough of these safe assets. Here, safe assets are a necessary underpinning of the modern financial system and it is essential to keep it growing in nominal terms. Even worse, we need to grow it rapidly to make up for the loss of other safe assets like private label MBS and Eurobonds in the eyes of the market. I am uncomfortable with how well this theory fits the evidence over the last few years.

I agree that we are in uncharted territory, but that also means that it's risky to say "we aren't close" to approaching a dangerous level, doesn't it? If there is zero precedent, how do we know the next trillion isn't going to be the tipping point? I'm not saying it will be (I don't think it will), but just making a point. I don't think Japan is a good comparison- almost all of their debt is owned by domestic investors, and I'm not sure we want to emulate their last 20 or so years as it is. That's the danger with trying to use other countries and/or other eras to dictate current policies- each one is unique. There has never been a country in our current situation- ever.

There are plenty of people who believe the debt doesn't matter at all, and plenty more who think it matters but dealing with the economy and unemployment is the more pressing issue. I get that, but I have a hard time taking it seriously without at least some framework of talking about when it would matter. I also have a hard time with the "we'll just print our way out of it", since it doesn't seem consistent with thinking debt/deficits do matter at some point.

 

[Slapdash]

For you guys in the "deficits don't matter" camp- is there a point where it does matter if we can always just print money?

I'm sure there is a point where it matters quite a lot and I don't want to find out where that is. I don't think it is soon though. My position is more akin to: deficits matter much less than is commonly assumed, in the short to medium term.ETA the bolded because I don't feel comfortable staring down a long-term structural defict either.

Yeah, I don't necessarily disagree that we're not there now, but I think this answer is kind of a cop-out (no offense). If you believe there is a level where it matters quite a lot, then you should be able to say what that level is, or at least give some idea, no?

I see what you're saying but there is no hard number that we know how the market will react to. In a lot of ways, the modern international monetary arrangement is in uncharted waters. We don't really have a lot of examples where countries have large debt loads in a currency they print to meet larger macro-economic goals and is priced based on international derivative contracts. Japan is the rule of thumb to take and I would think Japan would have had problems already (attributable to their large debt load), but they really haven't. The private sector continues to buy their debt and hasn't lost confidence in it. I don't know what it will take for the market to lose its confidence; I wouldn't want to press my luck and find out.

There is an alternate theory though that the debt level really doesn't matter at all (see MMT). That the shadow banking sector is so large and so dependent on using "safe assets" like Treasuries as collateral for Repo that the level of debt will never matter as long as the country that issues it can always issue more to meet the obligations. We know shadow banking is seemingly impossibly large and much more integral to money creation that commonly assumed. Broker dealers, money funds, traditional banks, and insurance companies just can't get enough of these safe assets. Here, safe assets are a necessary underpinning of the modern financial system and it is essential to keep it growing in nominal terms. Even worse, we need to grow it rapidly to make up for the loss of other safe assets like private label MBS and Eurobonds in the eyes of the market. I am uncomfortable with how well this theory fits the evidence over the last few years.

I agree that we are in uncharted territory, but that also means that it's risky to say "we aren't close" to approaching a dangerous level, doesn't it? If there is zero precedent, how do we know the next trillion isn't going to be the tipping point? I'm not saying it will be (I don't think it will), but just making a point. I don't think Japan is a good comparison- almost all of their debt is owned by domestic investors, and I'm not sure we want to emulate their last 20 or so years as it is. That's the danger with trying to use other countries and/or other eras to dictate current policies- each one is unique. There has never been a country in our current situation- ever.

There are plenty of people who believe the debt doesn't matter at all, and plenty more who think it matters but dealing with the economy and unemployment is the more pressing issue. I get that, but I have a hard time taking it seriously without at least some framework of talking about when it would matter. I also have a hard time with the "we'll just print our way out of it", since it doesn't seem consistent with thinking debt/deficits do matter at some point.

Good points overall. I guess I'm just a little more comfortable in the grey-area here. I think, at the very least, a country would be safe keeping the debt constant with the economy and ignoring the total levels.

If anything, I think foreign investors in our debt makes it harder to see a time when our debt matters. When other countries are using your debt to control their exchange rates, their purchases aren't going to be very discresionary. I don't want to emulate Japan, but I think it is safe to say their debt is more of symptom than a cause of other problems.

I don't see very many people claiming the debt doesn't matter, particularly in the political class. I was reading Bernie Sanders talking about the dangers of the debt. I think it is pretty much consensus. The Fed's position certainly isn't that we can print our way out of this mess. Their balance sheet opperations are the same thing as monetizing the debt. They certainly warn about the debt at every opportunity and believe that their job would be easier if we get the long-term budget sorted out. No, the only people I see that are advocating "we'll just print our way out of it" are economists pretty far outside the mainstream.

Krugram's arguements that the bond-vigilantes would be beneficial is nothing more than ridiculous hackery. Even he can't explain a working model where that makes a damn bit of sense.

 

[RCon]

I don't know anyone who's in the deficits don't matter camp. There's just disagreement about how much and how long it takes before they matter a lot.IMO Krugman has been pretty much proved right in a real time experiment from 2008-2012 about what happens in a ZIRP environment, including the effects of austerity.

I disagree that Krugman has been proved right, due to two factors.1) We haven't actually tried austerity, so I don't think anyone has been proven right or wrong regarding its effects.2) Most of those arguing for austerity are suggesting that it may be harmful in the short term but beneficial in the long term. Since we have yet to experience the long term, no one has yet been proven right or wrong regarding the effects of any policy over the long term.

There are other countries which have implemented austerity. The results are pretty unambiguous.There are also a handful of previous instances when this austerity became self-reinforcing -- where the situation actually gets worse the more austerity you apply. The Great Depression for example. Only via an inflationary devaluing of the dollar (1934) and then the massive stimulus of WWII did we escape the deflation.

Have any other countries significantly cut spending? I'm not so sure they have. Also, even if they have, those making the argument for austerity are suggesting that the whole point is to endure short term pain for long term gain. To then get upset about the short term pain kind of misses the point.

 

[Andy Dufresne]

Deficit "mostly solved"...

"It just so happens that he's only MOSTLY dead..."

 

[Dinsy Ejotuz]

You don't think the US can service a debt/GDP ratio of 70-75%?

 

[Joe T]

You don't think the US can service a debt/GDP ratio of 70-75%?

Is this a static number?

 

[RCon]

You don't think the US can service a debt/GDP ratio of 70-75%?

Forever? No.

 

[RCon]

Deficit "mostly solved"..."It just so happens that he's only MOSTLY dead..."

Headline: "Mostly solved!"Fine print 1: "As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon."Fine print 2: "CBPP goes on to advocate another $1.4 trillion in revenue and/or spending cuts..."Fine print 3: "True, there are projected problems further down the road..."

 

[pantagrapher]

Deficit "mostly solved"..."It just so happens that he's only MOSTLY dead..."

Headline: "Mostly solved!"Fine print 1: "As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon."Fine print 2: "CBPP goes on to advocate another $1.4 trillion in revenue and/or spending cuts..."Fine print 3: "True, there are projected problems further down the road..."

How duplicitous of Krugman to admit that stuff!

 

[dickey moe]

The Krugman Times

 

[Maurile Tremblay]

Lies and Lying Liars.

 

[RCon]

This thread is a perfect example of the downside of the new board. I really miss the "Jackasses insulted by comparison" subheading...

 

[Slapdash]

This thread is a perfect example of the downside of the new board. I really miss the "Jackasses insulted by comparison" subheading...

 

[SacramentoBob]

The Krugman Times

This is really creepy.

 

[pantagrapher]

Lies and Lying Liars.

...you can always count on Paul Krugman of the New York Times ... to jump on the bandwagon if the politician happens to be a Democrat.

 

[Joe T]

Lies and Lying Liars.

He spelled "schtick" correctly.

 

[Andy Dufresne]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

 

[fatguyinalittlecoat]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

What would be your solution to the problem he identifies?

 

[IvanKaramazov]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

What would be your solution to the problem he identifies?

Do nothing.

 

[fatguyinalittlecoat]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

What would be your solution to the problem he identifies?

Do nothing.

Because you don't actually think it's a problem or because solutions involving redistribution are worse than the problem itself?

 

[IvanKaramazov]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

What would be your solution to the problem he identifies?

Do nothing.

Because you don't actually think it's a problem or because solutions involving redistribution are worse than the problem itself?

Some of both. It's a fact of life in a modern economy that some skills are going to become obsolete over time; I don't see that as a major issue. Most people change careers several times during their working lives, and they seem to get by okay.

The kind of redistribution necessary to shield workers from the negative effects of technological change would probably create a lot more inefficiency than our current minimalist safety net does, so there's also that.

 

[Slapdash]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

When have we tried to have a safety net that guarantees health care and basic income?

 

[fatguyinalittlecoat]

Most people change careers several times during their working lives, and they seem to get by okay.

The kind of redistribution necessary to shield workers from the negative effects of technological change would probably create a lot more inefficiency than our current minimalist safety net does, so there's also that.

I'm not sure that displaced workers generally "get by okay." It seems to be a real hardship for lots of workers and their families. Sometimes it destroys entire communities, too, like when a big factory shuts down.

I think it's worth it to give up some efficiency to promote other objectives.

 

[timschochet]

I think Ivan is right. But Krugman provides food for thought, as always.

 

[Slapdash]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

What would be your solution to the problem he identifies?

Do nothing.

Because you don't actually think it's a problem or because solutions involving redistribution are worse than the problem itself?

Some of both. It's a fact of life in a modern economy that some skills are going to become obsolete over time; I don't see that as a major issue. Most people change careers several times during their working lives, and they seem to get by okay.

The kind of redistribution necessary to shield workers from the negative effects of technological change would probably create a lot more inefficiency than our current minimalist safety net does, so there's also that.

Our current safety net is extremely inefficient at dealing with displaced workers, unlike a minimum income program that Krugrman talks about.

 

[Dinsy Ejotuz]

Some of both. It's a fact of life in a modern economy that some skills are going to become obsolete over time; I don't see that as a major issue. Most people change careers several times during their working lives, and they seem to get by okay.

We're not talking about buggy whip manufacturers here. We're talking about technology increasingly eliminating the need for low-skilled laber across many/most industries, and there is realistically no new skill available to people that will let them earn a living. We can't all be highly skilled.

What do you do with the people who are permanently left behind?

 

[Andy Dufresne]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

When have we tried to have a safety net that guarantees health care and basic income?

I just thought it was funny the way he put it:

So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.

He's all but admitting that he can conceive of no other idea.

 

[Andy Dufresne]

Some of both. It's a fact of life in a modern economy that some skills are going to become obsolete over time; I don't see that as a major issue. Most people change careers several times during their working lives, and they seem to get by okay.

We're not talking about buggy whip manufacturers here. We're talking about technology increasingly eliminating the need for low-skilled laber across many/most industries, and there is realistically no new skill available to people that will let them earn a living. We can't all be highly skilled.

What do you do with the people who are permanently left behind?

Make less of them.

:idiocracy:

I'm only kind of joking there. But you're touching on the stuff that I thought Krugman was making a good point about. It is a concern and I don't know what the answer is but I'm pretty sure it's not paying people to do nothing just because they exist.

 

[fatguyinalittlecoat]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

When have we tried to have a safety net that guarantees health care and basic income?

I just thought it was funny the way he put it:

So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.

He's all but admitting that he can conceive of no other idea.

Doesn't seem like the rest of you can either.

 

[Andy Dufresne]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

When have we tried to have a safety net that guarantees health care and basic income?

I just thought it was funny the way he put it:

So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.

He's all but admitting that he can conceive of no other idea.

Doesn't seem like the rest of you can either.

So I'm just as useless as Krugman on the issue. Yay me!

 

[Slapdash]

Some of both. It's a fact of life in a modern economy that some skills are going to become obsolete over time; I don't see that as a major issue. Most people change careers several times during their working lives, and they seem to get by okay.

We're not talking about buggy whip manufacturers here. We're talking about technology increasingly eliminating the need for low-skilled laber across many/most industries, and there is realistically no new skill available to people that will let them earn a living. We can't all be highly skilled.

What do you do with the people who are permanently left behind?

Make less of them.

:idiocracy:

I'm only kind of joking there. But you're touching on the stuff that I thought Krugman was making a good point about. It is a concern and I don't know what the answer is but I'm pretty sure it's not paying people to do nothing just because they exist.

I'm all for increasing funding for birth control and abortions.

 

[Andy Dufresne]

Okay. Let's get serious a moment.

Which of these modern skills really require four year degrees? I think he tickles the edges of it when he posits:

And the modern counterparts of those woolworkers might well ask further, what will happen to us if, like so many students, we go deep into debt to acquire the skills we’re told we need, only to learn that the economy no longer wants those skills? Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).

I think the answer is an evaluation of the current education (particularly post-secondary). Should people be getting four year degrees that teach subjects broadly or is it more worthwhile to go to 1-2 year trade schools that teach specific knowledge sets?

 

[fatguyinalittlecoat]

He raises some good points but then falls back on his tried and tired solution.

"What are we supposed to do with all these people who have skills we don't need? Pay them anyway, of course."

When have we tried to have a safety net that guarantees health care and basic income?

I just thought it was funny the way he put it:

So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.

He's all but admitting that he can conceive of no other idea.

Doesn't seem like the rest of you can either.

So I'm just as useless as Krugman on the issue. Yay me!

No, Krugman advocated for a good solution.