So. now Krugman has almost started to rant. Miffed that his generally "economically correct" arguments against austerity are seemingly falling on deaf ears, Krugman has upped the ante - he now wants all to believe that economic policy should be driven by near term factors - and in the long(er) term we are all dead.
This is dangerous thinking. On this logic, his support for climate change would seem ridiculous - after all near term pain is apparent - why take it for long(er) term benefit - when we are all dead. This same argument is what prevented the US Fed from taking away the punch bowl when the party was getting raucous. Now that the participants are suffering a hangover, the "nobel" prof would have you believe that the best antidote is more of the punch bowl. Exactly in what condition that needs to be taken away remains unanswered - just not NOW.
1 comment:
But, dont you think stimulus packages by the governments will lead to a bigger debts and ultimately soverign defaults and we could see that in the european nations and that can repeat anywhere if the same strategy is followed. Even India over a period of time can become greece becoz of its debt to gdp almost near 85% if our fiscal deficits are not reduced then tommorrow we can also become greece and our growth story will definately be in jeopardy unlike all the experts beliefs on the secular growth stories...But, Krugman upto a certain extent is right becoz atleast he used a point of austerity which can reduce the government debts which over a period of time will decline the purchasing power of a currency which makes most of the middle class people in our country depressed.
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