The Glade 4.0

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He also wants the government to do the spending and thinks the reason we're still in a recession is because the stimulus should have been trillions not billions.

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“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

Yeah I read that last night. I don't think anyone out there is better and being so wrong and pompous as Krugman.

Hes like "oh we need to spend a quadrijillion dollars ten years ago and we need to do it in 1843". Its just nuts. At least Obama can sleep softly listening to the sweet words of this moron and feel consoled.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Krugman's explanations and policy advice are rarely of value. I merely wanted to point out that he's acknowledging the economic reality of a depression. It's rather amusing to watch the mainstream economists shift in the breeze.

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I think there would be benefits to increased spending in the really really long run, but none in the short or mid distance game. Thing is, I think there's much greater benefits (at this point) in letting market forces reach equilibrium.

Seems to me, the best thing would have been to not put the gov's thumb on the scale in the first place.

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In time, this too shall pass.

Government spending only works in the short term. If you look at the policies since 2008, particularly those of the Obama Administration, you'll see that the government spending did exactly what it was designed to do: push the United States into an demand cycle for durable goods and invested wealth expenditure. That is to say, the New Home Owners Tax Credit, Cash for Clunkers, Education Spending, etc. merely shifted future demand into the present. By making it more appealing to purchase these things, the policies created a short term cash infusion into languishing markets while pretending to demonstrate care for the overall health of the economy. But history demonstrated, as it has time an again, that accelerating demand is merely a temporary stop gap that creates a large market decline than non-intervention. As such, May was the worst month for housing markets in almost 18 years, which is rather ironic, since we have a 100 years or more of historical data demonstrating it's always the strongest month of the housing year.

What's truly disturbing with regard to those sorts of policies is how much they ignore the long term needs and forces in a stable economy. Moving paper money around in debt encumbered structures doesn't come close to generating or perpetuating real spending. What it does is deplete long term viability by chaining current purchases to future productivity.This depression is an equilibrium exercise as it is. Contrary to the notion of the managed economy, markets world wide are exerting pressure against the artificial displacements created by regulation (no, not regulation in the free market sense that certain parties will inevitably want to argue). As such, supply and demand curves are pushing back against negative pressures in an effort to approach economically valid behaviors. And these pressures are detrimental to policy and government control of market sectors. It gets really complex, but surveying empty housing developments nation wide suggests that there is vastly more supply than demand for housing in the U.S. And, sadly, it's going to take a long time for that relationship to normalize in any meaningful way. Consequently, if we go back to the government policy of shifting demand forward (New Home Owners Tax Credit), we see government policy actually increasing the time to recovery.All the historical data indicates this to be true, but we're at the tail end of a world wide experiment in the failure of government.

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What do you think about the assertion I've heard a bunch of times now that increasing the deficit via spending is a lesser evil than doing nothing and allowing deflation to increase the deficit even more?

The same thing I've said about that argument every time you've ever mentioned: any government spending and intervention made now merely exacerbates this reality over the long term. Sooner or later, you have to pay the piper; and the longer you keep him at bay, the more time he has to compound his interest. Our economic policy, and the economic advice of individuals like Krugman, is sick in that regard. Indeed, your "assertion" is precisely the sort of policy path he's advocating: keep spending money you don't have so the depression never really happens. It is both economically and historically ignorant.

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Its a bunch of bunk.

We need to drastically cut spending and almost as drastically cut taxes and start hammering down the debt.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Elmarnieh is right.

So is Khross or that matter.

something I've been pondering is that if we remove the safety net for the dole recipients, a lot of them would go back to work, or jail if the work turned out to be illegal.

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones

What jobs are they going to go take? We have 10% official unemployment or like 20% real unemployment, that's like 15-30 million people already looking for work who cannot find jobs.

Boy, if only we could find work for them...

/looks at the 10-25 million illegal immigrants in the US

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“The duty of a patriot is to protect his country from its government.” - Thomas Paine

Ok let's just 175 million as the nice, round number of people who "should" actually be working in the United States. Let's highball Xequecal's estimate of unemployment at 20%: that's 35 million people. That leaves 140 million people employed. Now, let's adopt a sensible employment model, adjust for non family status and come up with a useful statistic:

The U.S. is still 60% over-employed.

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Is this one of those, "women should not have ever entered the workforce because it depressed earnings for everyone" arguments?

Nope. It's just a supply and demand argument.

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Wow, and you still support removing any and all safety nets? If your theory is correct, we have about 100 million in "surplus population" we need to rid ourselves of now. It never ceases to amaze me how conservatives can support policy positions that will necessarily result in the deaths of millions or even tens of millions, and then still claim the moral high ground over all the people they're shoving in a hole.

Correction to terms aside, what are you talking about?

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Well, if we remove all welfare, and reduce the employment force to what you say is accurate, that's a LOT of people who can no longer feed themselves.

So he is now acknowledging a depression in an attempt to fish more money...to make the hole deeper?

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"Life isn't divided into genres. It's a horrifying, romantic, tragic, comical, science-fiction cowboy detective novel. You know, with a bit of pornography if you're lucky."
— Alan Moore

Really? You do understand that by current tracking guidelines almost 90% of the U.S. population was unemployed between 1776 and 1880? I mean, seriously, you making a whole bunch of assumptions that have nothing to do with the reality of over-employment.

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Yes.

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People had a lot more kids in those centuries. You had the father supporting 6-8 kids. Today you have two parents supporting two kids. Your hypothesis means out of every three such families, one will lose all their income, and the other two families aren't obligated to help them survive in any way.

My hypothesis means nothing of the sort, Xequecal. Of course, my family is not obligated in any way to helping yours survive, or the guy's down the street, or whoever else the Federal government deems more entitled to my labor than me. And that seems to be the big problem with your outlook on the world. After you familiar with Vilfredo Pareto?

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Are you talking about pareto efficiency, which says that in a system that is pareto efficient one entity has to lose for another to gain?

And it amazes me how liberals when confronted with the reality that their policies will result in the killing of 100's of millions of people blame conservatives for pointing this out when the time comes and think the conservatives caused it.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville