The Big Fail, Paul Krugman on the economy

Now that the fiscal cliff drama is over we can look forward to the struggle over raising the debt ceiling. The fun never ends! When is Washington going to actually deal realistically with our budget?


The story, at this point, is fairly straightforward. The financial crisis led, through several channels, to a sharp fall in private spending: residential investment plunged as the housing bubble burst; consumers began saving more as the illusory wealth created by the bubble vanished, while the mortgage debt remained. And this fall in private spending led, inevitably, to a global recession.

For an economy is not like a household. A family can decide to spend less and try to earn more. But in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income. If everyone tries to slash spending at the same time, incomes will fall — and unemployment will soar.

http://www.nytimes.com/2013/01/07/opinion/krugman-the-big-fail.html?_r=0

The last four and a half years have gone exactly by his economic blueprint... he just doesn't ever want it to stop.

What an idiot.

And here in America, Republicans insist that they’ll use a confrontation over the debt ceiling — a deeply illegitimate action in itself — to demand spending cuts that would drive us back into recession.

The truth is that we’ve just experienced a colossal failure of economic policy — and far too many of those responsible for that failure both retain power and refuse to learn from experience.

Simple truth

so this shit is so damn good it needs TWO threads. I see.

I hear krugman has a dingleberry hanging off his ass, maybe you and FT can fight over who will remove it?