… And Take Over They Will!
I love Paul Krugman. He was onto "W the Shrub" from day one, from before day one. And for this they gave him a Nobel prize. But I was compelled to rip his column today via "comments" as follows:
Come on Paul! Let's get real here! Aren't you (more than a little bit) ignoring the reality that economics is a "social" science as much as a physical/mathematical one? Thus, what to do about the fact that so many in the world (not just Americans, but as regards "America") today view the future from essentially (as I always have) an anarchist’s perspective (don't trust anyone, least of all someone saying "I'm the great big American and I'm in charge")?
Can't you at least acknowledge that most of us around the world see deficit reduction (but not lower taxes for the rich; I can't see that at all) as necessary under the United States’ present dilemma (spending $3 for every $2 taken in) -- if only as a (necessary) means to restore trust?
I mean, how do you expect people to again "invest" in a system they have increasingly diminishing confidence in. Surely at least some austerity (suffering or no -- undoubtedly there will be some) could go a long way to restoring said confidence in said "system?"
Yes. The Fed can make it easier for people to spend money, but it can't make them spend it. And when the Fed/govt simply spends it for them (in such challenging times as these) they'll just resent and retrench even more and trust even less -- to the point of "Tea Parties"...
So yes, Professor Krugman, as mostly always, you are (technically) correct. The Liquidationists are united -- but you forgot the "... and taking over" part. Because taking over is exactly what they're doing. And frankly you're not really helping by appearing so dogmatic! In short, this country can't go from Keynes to Friedman and back to Keynes in a mere 30 years. It just can't! SOMETHING has to give. And that something is the National Debt.