Wednesday, August 24, 2011

What Keynesians Believe

Had to throw this into the blog. This is the economics that the government and idiots like Paul Krugman believe in.

This is why we are in so much debt. Public spending is not good. We are allocating resources (taxes) or printing money (inflation) to create jobs that the free market would not normally produce i.e. we are funding inefficient investments. This is how bubbles occur like the one we saw in housing in the last decade.


  1. Paul Krugman 2002 "The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
    Paul Krugman 2011 "If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"

  2. It's baffling as to how he won a Nobel Prize. He acts like bubbles, inflation, and debt are all good for the economy. All you can do is laugh.