For Krugman It's The Politics, Not The Economics

[Annie]

Speaking of switching!

JustOneMinute: Let's Hear From Another Hard Money Advocate

November 20, 2010
Let's Hear From Another Hard Money Advocate

Even as Paul Krugman questions the patriotism of Republicans who question the efficacy of the Fed's QEII, we hear other voices fretting about deficits, monetized debt, and hyper-inflation in the US:

[L]ast week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.

...How will the [fiscal] train wreck play itself out? ...[M]y prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.

And as that temptation becomes obvious, interest rates will soar. It won't happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.​

So even with rates low and headed lower, we were being warned to expect hyper-inflation down the road, once markets woke up to a reality discernible only by a few. Of course, that was Paul Krugman writing in 2003 during a weak recovery and just before the Iraq War; Patriot Paul was opposed to the Bush War and the Bush tax cuts, so he was also opposed to looming deficits and the monetization thereof regardless of current labor or credit market conditions...

 

[waltky]

Nobel economist Paul Krugman advocates spending, defends food stamps...

Krugman: More Government Spending Would Revive Economy in Two Years
January 16, 2013 – Paul Krugman, a liberal economist and New York Times columnist, said increased government spending is key to economic recovery.

During an interview on Friday on “Moyers & Company,” on PBS, Bill Moyers asked, “And you argue that this could actually be solved in two years?” Krugman, a Nobel prize winner, answered that it was a matter for more government spending.

“That's right, and that's not a number plucked out of thin air,” Krugman said. “That's a guess at how long it would take to get a serious spending program going, and we could actually make a lot of difference in it even quicker than that, because the fact of the matter is far from having effective job creation program, we've actually been pulling back.

“We've seen state and local governments lay off hundreds of thousands of school teachers,” Krugman continued. “We've seen public investment in basic stuff like road repair cut way back. If we just went back to normal rates of filling potholes and normal rates of employment of school teachers that could be done in months.”

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Krugman: Food Stamps Are the New Soup Kitchens
January 16, 2013 – Liberal economist Paul Krugman, a New York Times columnist, called food stamps the “soup kitchens of the modern depression,” at a time when federal spending on food stamps has climbed to a record $80.4 billion.

“We have in some ways made things more civilized, but also more invisible,” Krugman said Friday during an interview with Bill Moyers on “Moyers & Company” on PBS. “Somebody said that food stamps are the soup kitchens of the modern Depression, that there are a lot of people who would be standing in line to get that soup who are instead – and it’s a good thing – who are instead getting – I guess now called SNAP Supplementary Nutrition Assistance Program, who are getting those debit cards and are getting essential food stuffs, and they’re at the grocery store and they look like anybody else,” Krugman said.

“But the fact of the matter is they are still as desperate. They are getting by day to day with aid of a trickle of government aid just like the people who are standing in line in the soup kitchens in the 30s, but they’re not visible,” Krugman continued. “We don’t have guys selling apples on the street corners, partly because city licensing wouldn’t allow that any more.

“But we do have—again we’ve got 4 million people who have been out of work for more than a year. The U.S. social system is not designed to take care of somebody who’s been out of work. We have unemployment insurance that’s intended to deal with short spells of unemployment. So there’s an enormous amount of misery, but it is mostly hidden,” Krugman said.

Spending on food stamps increased by $2.7 billion in fiscal year 2012 from the fiscal year 2011, when it was at $77.6 billion, according to the Monthly Treasury Statement. From fiscal year 2009 through fiscal year 2012, spending on Supplemental Nutrition Assistance Program (SNAP) increased by $24.8 billion.

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