Krugman’s Fantasy World

This is what passes for great thinking these days.  In this article in the Guardian, Paul Krugman essentially says “Hey, we’re all broke and deep in debt. What should we do?” He answers by saying (again, I’m paraphrasing) “Print more money and spend it! Give it away! Go ahead, it won’t hurt a thing! Free money for everyone! It’s patriotic!

The sad thing is that he’s a Nobel prize winner for putting ideas like this into print, so some people actually think he must be brilliant. He’s even worse than Keynes (who advocated saving surpluses and spending the savings to lessen the impact of recession/depressions) because he actually thinks you can print and spend money you don’t have forever. It’ll all work out just fine thank you.

And yes, if you use a short enough timeframe, printing money looks like it works just fine. (Like Douglas Adams using leaves for money – everyone seems rich!) But every government that’s ever tried it has eventually disappeared. The French Revolution was way back in 1789, but the hyper inflation that led to Nazi Germany was less than 90 years ago.

gk

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