"Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink. This really isn’t a debatable proposition at this point."
The best part about being a great economist is that you can make statements like this, and your detractors have nothing on you.
For balance, here's Krugman at his worst:
"By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing."
So the right-wingers have condeded the principle of Keynesianism. Good point.
"Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force."
So you've conceded the principle of Monetarism (and argued elsewhere the Zero Lower Bound doesn't matter), but insist that unconventional monetary policy (QE4, negative Interest On Reserves, asset purchases) can't do the trick?
EDIT: The last point is of course a relatively minor quibble considering the importance of getting right-wingers to acknowledge the other ones.
Last edited by Goo For You; 02-10-2013 at 05:55 AM.
Lucky I catched your edit. Let's start with you defining artificially low.
EDIT: I want an answer to the question what makes a certain interest rate artificial. How do you define the natural rate?
The Federal Reserve took extraordinary actions in response to the financial crisis to help stabilize the U.S. economy and financial system. These actions included reducing the level of short-term interest rates to near zero. In addition, to reduce longer-term interest rates and thus provide further support for the U.S. economy, the Federal Reserve has purchased large quantities of longer-term Treasury securities and longer-term securities issued or guaranteed by government-sponsored agencies such as Fannie Mae or Freddie Mac.
Originally Posted by RiotGrip
I can tell how people's mind work because I have training.