Nobel Prize-winning economist and New York Times liberal lunatic Paul Krugman has thrown FDR under the bus. He now admits that Roosevelt’s tax-and-spend socialism didn’t end the Great Depression, but World War II did.
We’re not sure he knows that’s what he did, but read his words from a recent column for yourself and see if that isn’t the obvious conclusion:
A naive view says that what we need is a return to virtue: everyone needs to save more, pay down debt, and restore healthy balance sheets.
The problem with this view is the fallacy of composition: when everyone tries to pay down debt at the same time, the result is a depressed economy and falling inflation, which cause the ratio of debt to income to rise if anything. That is, we’re living in a world in which the twin paradoxes of thrift and deleveraging hold, and hence in which individual virtue ends up being collective vice.
So what will happen? In the end, I’d argue, what must happen is an effective default on a significant part of debt, one way or another. The default could be implicit, via a period of moderate inflation that reduces the real burden of debt; that’s how World War II cured the depression. Or, if not, we could see a gradual, painful process of individual defaults and bankruptcies, which ends up reducing overall debt.
A little inflation. That’s all we need. And, of course, government economists are so adept at monetary policy that they will be able precisely control the amount of inflation they introduce into the economy.
Much like they’ve been able to precisely control the rest of the economy for the last two years.
Argentina, here we come.
Source: New York Times
This post was last modified on March 13, 2021
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I've never really been a fan of the theory that WW2 got us out of the great depression. But if you are the funny sort of Keynesian that Krugman is and WW2 is really the only thing you can point to as a success for a failed economic theory then might I suggest that the following things must be performed to make this system work:
1. The drafting of nearly every able bodied man, woman and child into the cause.
2. Conscription of every industry into the creation of products that will never lose their value due to overproduction as they are continually being blown up or lodged into corpses.
3. A population forced to live with very little and a rationing system for most essential goods.
4. The near destruction of Europe and Asia.
5. A holocaust.
6. The death of seventy million people.
7. The atomic bombing of two cities in an attempt to end a most horrific chapter in human history.
But given the world view of people like Cass Sunstein and Paul Ehrlich perhaps I should not be making such suggestions ... even in jest.
So, out of one side of his face he says "Yes, we need to spend our way out of this recession”.
Then out of the other side of his face he says "I’d argue, what must happen is an effective default on a significant part of debt,"
So Paulie boy, do we spend our way all the way out, or do we spend some and default on the rest? Or are you merely suffering from a protracted case of ambulatory rectal-cranial infusion complicated by a case of persistant pedal-oral infusion?
Perhaps you should consider ingesting feces and directing canine orifications towards the lunar surface.
Or maybe go to the local college and audit Economics 101.
Hey USN, I refer to your "...ingest..." line as "ESABATM". But we are saying exactly the same thing. FDR did nothing good for the country. His "Raw Deal" prolonged the depression, the same way Obomie's ideas are keeping our, and most of the rest of the world's economies in trouble. He is clever as a fox, and he's getting everything he wants. I keep hearing about the "second revolution" and I'm beginning to think the sooner we get started, to sooner we can heal from it, and get back to being the greatest country that ever existed.
Paul Krugman is dumb and one feels just a little more stupid for reading his blurbs.
Between him & Robert Reich, aka, gnome in the Tralevocity ads, are idiots who have never applied their economic genius in the real world. Why? Because what they believe does'nt work in the real world.
In a way what he said made sense. Think about it, despite FDR's New Deal programs in 1940 and 1941 millions were still unemployed. Now here comes the shipyards, airplane factories, tank factories, and the influx of people joining the Armed Forces and putting people back to work. Thats just my take on it. Paul Krugman could have put his words a little better or did his homework. FDR can't take all the credit for ending the great depression.
WorldWar2 ended "The New Deal", which ended the depression. So in a way, Hitler, Mussolini, & Tojo forced us to go away from FDR's social engineering efforts to fight the war. So in a roundabout way, Krugman is right. Does'nt happen very often, but he's sort of right here.
+1317 (price of 1oz of gold as of this writting)
Yep, democrats. Longing for hitler since '46. If another one comes along, they can get the economy going, and look good besides. Never mind about the 30 or 40 millions that die because of it.
They should use that as a slogan: 'Vote democrat. When you compare us to Hitler, we're not that bad.'
Paul Krugman is an irrelevant idiot. "Yes, we need to spend our way out of this recession" - sounds like something Joe Biden would say - oh wait, he said pretty much that. Keynesian economic theory has been debunked so many times that this is bordering on the absurd, just like "peak oil" and "spreading the wealth around".