TimesTalks: Paul Krugman: How Deep in Debt Can America Go?

[fosponomot]

running that app on my phone gave me electric shocks.

[wph00]

Just goes to show you a really smart man can be dumb. This guy is just good ole stupid! I guess that is why he works for the New York Times...........

[SSedmak]

Well, the USA has been running deficits year after year after year with Krugman's vocal support. Where indeed does it end? The USA is now +$4 trillion in debt since this speech, and what have we got to show for it? How much running room do we have now that we've used up the running room to make sure that banksters kept pulling in massive bonuses while staying out of prison?

[jdouche]

The only answer they have is to keep borrowing and spending. I wonder what Paul Krugman is suggesting we do now that we have debt to GDP of about 100%. By guess is more borrowing and spending.

[billhopen]

how does he come up with debt of "45% of GDP" ???!!! I've got a consensous a score of economists I read that say we are near or over 100% right now

[arerix]

@billhopen Interview is 2 years old. He is probably commenting on numbers from end of 2008.

[Aluminumati]

What he did not say was that as long as the people are kept ignorant of what their govt is doing, the people will continue to accept what is done. And since American media is controlled, the govt can enslave the people with massive amounts of debt with little risk.

[daveperk]

A Nobel prize is not an education or accumulated wisdom. It is an award for being leftist.

[rinkster22]

I listened to this loser for years, just to laugh at his fantasy bable. Comparing Belgium's debt percentage to our debt percentage? 

[bobshenix]

So how many more trillion do we have to play around with NOW.... before we realize we can't keep playing God with economics and that you were totally wrong, Paul???

Meanwhile we ignored the Ron Pauls and Peter Schiffs to pursue Mr. Krugman's fantasy land and keep the gravy train going... at our peril. And anyone who wants to bring up Europe in this discussion obviously isn't paying attention to what is happening with the Euro!!

Self-important douchebags.

[tfiasco88]

these comments are funny bc everyone in the mainstream who has opposing views to Krugman (and Keynesians) have been wrong, but the Keynesians have more than been vindicated by the evidence.

[eduardotoronto]

Paul Krugman is stupid

[BlunderCity]

Krugman says: "The US... has an enormous abitity to collect taxes and to service debt. If we want to we could do huge things"

What does he mean by "enormous" or "huge things"? The US government has never managed to collect more that 20% of GDP in taxes (and those were during boom times), what makes Krugman so confident they can achieve "huge things"? Even if they manage to go to 20% of GDP (I doubt it in this economy), that's only 800 billions or half the deficit.

Huge things? Where?

[BlunderCity]

@seahawks78

"US of A does not produce ANYTHING now"

"entire US manufacturing base is gone"

This I hear from a lot of uneducated people. Sure manufacturing in the US had been on the decline (actually it's not technically true, it has increased about 50% in the 90s and another 20% in the 2000s, so not great but growing) and stands at about 1.8Tr. That of course makes the US the world's leading manufacturer.

Well not exactly a country does not produce ANYTHING (in capital letters just for you)

[ArmednSafe]

Krugman is delusional about the nature of debt and government spending. We're in the bust from a bubble caused by going off the gold standard in the '70s. The government has been consuming more and more of our resources (instead of the private sector using them to create things we want and things to make more things we want in the future) by creating all kinds of funny money and going into a ridiculous amount of debt. The solution is to go back to sound money so we can have a real economy again.

[anryth]

Krugman is one of those guys who has dedicated his life to being consistently wrong about nearly every issue. It makes no sense, if you keep getting the wrong answer why would you continue to believe what you preach? I guess he will just keep coming up with excuses and blaming free markets while claiming that we just didnt print enough money... no matter how much we spend he will always say more.

[nickqt]

@anryth

you are an idiot. please never fucking post on youtube again. thanks in advance.

[anryth]

@nickqt Sorry, Im not ready to give into tyranny and misery just yet as you seem to have done.

[nickqt]

@anryth

lol

[anryth]

@nickqt lol

[sfjeff1089]

@jdat747 -- unfortunately, republicans are fighting fixing the problem tooth and nail, which is why we need to stay afloat first. You wouldn't be speaking so glibly if you had lived through the first one. The signs were that this recession was actually caused by even bigger structural imbalances than The Great Depression, so if we were on a gold standard like then, we would certainly be calling it Great Depression II by now.

[AvisChampion]

This guy is a total idiot. Anyone can win noble prize - Obama did. It means NOTHING!

[mkrulic517439]

@AvisChampion Im from missouri. show me. go get a nobel prize if its that easy.

boom goes the muther fucking dynomite

[AvisChampion]

@mkrulic517439 The ignorant always turn to name calling when the little brain runs out. My great uncle won a Nobel peace prize and he would say, they are giving these things away. It is never to late to grow up and see the true.

[mkrulic517439]

@AvisChampion "It is never to late to grow up and see the true." this implies I am immature. that is name calling, i.e., argumentum ad hominem. now for your own words, "The ignorant always turn to name calling when the little brain runs out." wait for it, wait,...BOOM GOES THE MUTHER FUCKIN DYNOMITE

[jdat747]

What makes anyone think that 5 or 6 trillion dollars later that it will be any easier to live within one's means?

When life isn't going in the right direction, the worst thing you can do is put off the appropriate change.

[maxstirner777]

What a horrible person.

[SaxWorks]

@shiatstain great, you have no debt.

But realize that the concept of debt actually has a positive side: it can increase the productivity of an economy. Those who borrow money can be more productive by creating, building, producing things that generate wealth. And those who have more disposable wealth are able to lend it out. It's a win-win situation.

So my point is, forcing yourself to maintain 0 debt gives you less capacity to grow the economy.

[jpkm123]

What's his position now and is he counting fanny & freddy liabilities into his calculations?

[fudan6262]

Massive post war-time spending cuts also contributed

[fudan6262]

I'm astonished he doesn't realize we didn't pay the debt down, we came out of a massive depression and GDP rapidly increased compared to debt, and if he really believes we have an amazing ability to increase tax revenue, maybe he should look at our historic rates of tax revenue at a percent of GDP, there have been very few times it has reached 20%, but mostly it hovers around 17-18%, spending as a percent of GDP on the other hand since the 40's has rarely been below 20%

[conspirator272727]

Too bad the Belgian government collapsed about 9 months after this.

[bweazel]

Did he and Bernanke share a test tube?

[dafarreller]

lol at idiots saying "well I can't spend beyond my means, why should the govt?"

This man won a nobel prize in economics and is an expert statistician, what makes you think that your anecdotal evidence is more valid?

[BarrySlisk]

@dafarreller

Obama got a nobelprize for doing precisely NOTHING. Nobel Prizes are pretty much given to people they like. Remember also that Hayek got the nobel prize and he did not agree with Krugman.

[erdemoz1]

this guys is an idiot.

[marsCubed]

@erdemoz1 Consider what USA might be like today, if in the 70s when the oil-crisis of OPEC price hikes, brought about a stagnation in the economy, if USA and others had invested in Green energy. It would have meant a period of debt, however today we would be in clover.

In Northern Europe some countries did just that. It is not rocket science, steer around problems, it creates jobs and wealth for everybody. Denmark sells off shore windfarms to the UK now.

[BarrySlisk]

@marsCubed

I'm from Denmark.

Our windmill factories are heavily subsidized and no success story. Actually the biggest one Vestas is now moving abroad and away from Denmark. So much for all the supposed jobs. And btw we pay much more for our electricity because of those damn windmills.

[fdutjklr]

@erdemoz1 Ad hominem attacks is a type of fallacious argument. I would like some evidence to support that claim please.

[cooperbry]

LOL

[rexdeodium]

5 - 6 trillion? Isn't the debt already 13 t? With unfunded liabilities the debt is more like 50 t!

[astro7894]

"We have five or six trillion dollars to play with"... its statements like this that prove to me that krugman is a socialist brainless economist. When the chinese stop rolling over the debt he will get a big shock and so will the average american. The sooner the defict is sorted out the better off the US will be and it will then be living within its means for a prosperous future.

[tommcreynoldscom]

A Nobel prize used to mean something. No longer. Its purely political now.

[jscottupton]

When this was filmed he says debt is 45 % of GDP (which was incorrect...at the time of the interview it was much higher). Guess what folks...it's now 88 percent and rising. Yes, Krugman has a Nobel Prize. No, he doesn't know what he is talking about.

[hamzyboy]

The difference between Belgium and the US is that Belgians a very high personal savings rate and is number 1 in the world for individual income tax while americans aren't . America needs to produce and save more and consume less. You can't stimulate the economy with more debt. So you can't compare these two countries america is like 300 million people belgium like 10million , you can't compare.

[lseidman]

Huh? Paul Krugman seems to be extremely confused about the state of our national debt. 13 trillion / 14.6 trillion is around 89% of GDP (or perhaps 80% - ish at the time of this answer), not 45%. No the tape isn't old, he knew that our deficit for the upcoming year would be 1.5 trillion, and that has never happened before, he is just very confused. And then manages to conclude that we have 6 trillion worth of running room? Yea, maybe if you're trying to run straight into an economic morgue.

[sfsTrader]

the united states stays in debt on purpose. whenever the dollar starts popping up a little, showing a little strenght the government starts borrowing. debt causes a weak dollar. a weak dollar brings in foreign wealth and keeps domestic wealth from leaving. the downside is that a weak dollar means the government cant buy as much foreign stuff, but i guess we have enough natural resources for that to not matter so much?

[grabagoodone]

Get some common sense, Paul. After WWII Us was that productive and competitive, that's why 110% debt ration was not a problem;

Now things changed, 40% means a lot.

[d0minatl0n]

I laugh at all you people who think you know more about economics than someone who has won a noble prize in economics!

[selfrealizedexile]

@d0minatl0n

Cuz the nobel prize is the objective, end-all-be-all of the discipline, amirite? Milton Friedman won it. Hell, F.A. Hayek won it. Krugman and Hayek are almost polar opposites. Maybe you should simply not comment at all if all you can add is "this politically-influenced committee wants to give this guy a rimjob."

[jeremyemilio]

@d0minatl0n

That's such a silly talking point. What if I said I agreed with Robert Mundell, rather than Paul Krugman? What if I told you that Mundell was a Nobel winner, too? What if I told you that Mundell's life's work has been the study of monetary policy, and his Nobel was for his work related to currency valuations, while Krugman's Nobel was "for his analysis of trade patterns and location of economic activity"? Where's that leave your silly talking point?

[chovbha]

@jeremyemilio Agreed

Add more: What if another Nobel winner Milton Friedman expressed absolutely reverse ideas than Krugman. Milton's legacy is that 4 countries in the world have national prize on his name.

Moreover: I certainly believe that I am more peaceful and peace loving than a Nobel Peace price winner Barack Obama, because I didn't send anyone to kill anyone while Obama actually sent troops.

Nobel is a piece of crap, who ignored most peaceful soul Mahatma Gandhi and praised Obama.

[Entropy137]

@d0minatl0n That seems to be the pinnacle of Keynesian arguments. "But he has a nobel prize!" Well so does Friedman and Hayek. If a physics nobel winner tomorrow came on tv and said, "we can strap feathers to our shoulders and jump off a cliff and nothing will harm us", then everyone will say they know more about physics than that guy.

[CyberAthletethefirst]

@d0minatl0n You mean like Krugman... Hyack... Freidman... I believe the queen said it best to the London School of economics: "Why didn't you know see this coming?" The letter to the queen reads like porky pig explaining... Economics. Prof. Steve Keen predicted it, Minskey predicted this. I as a sociologist predicted it. But what do I know I don't have a Nobel Prize... yet.

[Dansje]

@d0minatl0n

Look up the history of Long Term Capital Management. It was a hedge fund run by Nobel Prize winning economists. They were going by their theoretical models which actually had little bearing on how financial markets really work, especially in times of extremes, which is when things matter most. They went completely bankrupt and caused a systemic crisis by being extremely stupid and taking on way too much leveraged risk.

Krugman operates confidently on flawed models of reality.

[BrettDunbar]

@d0minatl0n LOL the nobel prize is a FUCKING JOKE!!!!!

[erwinthehamsandwich]

@d0minatl0n There is hardly such a thing as knowledge in economics.

[lagrangewei]

@d0minatl0n just because he knows more doesn't mean he has to be truthful. do think about that and it and the implications of blindly believing it...! =)

besides the question they ask him is wrong, it doesn't matter if US can borrow more, what matter is the more US borrow, the more interest US taxpayer has to payback. the amount of money US pay to service it debt can pay for half the healthcare cost of US. think about that!

[Dkouts57]

@d0minatl0n

this is a man of theory only. he has never run a business in his life. he is a life time academic so why should his opinions on business, finance and economics matter when his life work is only theoretical and never been applies by anyone mot of all himself

[MomSaysImCool]

@d0minatl0n Best. Comment. Ever.

[dbill27]

@d0minatl0n I laugh at anyone who takes a nobel prize seriously. Paul krugman has never once been right, he deserves to be lauged at.

[akalish21]

@d0minatl0n Well first off, he won the prize with a paper on the topic of international trade not policy. (Although I am sure he understands that side as well) The problem with Krugman as an economists is that he believes a specific "genre" of theory (among many conflicting theories) in economics that many others whom study economics do not believe is correct because it ignores individual preferences that cannot be summed up by macro aggregate theory. Remember, socialism didn't work.

[bobsacamano1]

@d0minatl0n Milton Friedman and Friedrich Hayek have Nobel prizes in economics and disagree with Krugman. Since they cannot all disagree and simultaneously be right, we must conclude that having a Nobel prize in economics does not guarantee that you are always always right about all things.

[btbblack]

@d0minatl0n I laugh at all you people who think that a nobel prize still means something. Barak Obama has a nobel peace prize and recently submitted the largest military budget in history.

[treysparker]

@d0minatl0n

I laugh at those who think a nobel prize in economics means the winner knows anything about economics.

You seem to be incredibly ignorant so let me inform you.

Those who awarded Krugman, themselves, are ignorant and misinformed. They are Keynesians.

Thus, Krugmans ideology agreed with theirs and so he was awarded the prize.

The standard itself is wrong. Please do research before you further embarrass yourself.

[mkrulic517439]

@treysparker you mean research like why after the stock market crash in 29 it wasnt till 32, 33 that there was a run on the banks. oh thats right, because we switched from keynesian to hyack. thats when the american people lost confidence and there was a run on the banks.

still think you know something about economics?

[parrottice1]

@d0minatl0n We people know we not only know more about economics, but also that we are morally superior to whoever decided to give this moron a nobel prize... probably the same folks who decided to give our failing president the peace prize for making peoples' lives worse!!

[Salvysahagun]

@d0minatl0n

Kissinger won a Nobel Peace prize while he was bombing south east asia with drones.

[627dre]

@d0minatl0n Nobel, libtard.

[harring4]

krugman is way off base. He doesn't realize that the debt is paid off by one of two ways. Printing money or raising taxes. Printing money is essentially raising taxes bc it causes savings to devalue (inflation). Higher taxes is always the worst thing to do during an economic slowdown because it doesn't allow the private sector to create REAL jobs. Try studying the great depression and the recession of 1921... The depression was prolonged by massive spending.

KrugmanV Schiff would be a bloodbat

[austenbosten]

@harring4

really, the Depression was prolonged by massive spending, then explain why GDP, GNP, and Industrial output figures went up from 1933-1936 and dipped in 1937, before rebounding a year later and soaring from 1939-1945?....all of this was due to massive government spending. The private sector only creates jobs when it needs to, and if there is a huge buyer (govn't) then the private sector will begin to create jobs to serve the demand.

[BarrySlisk]

@austenbosten

The government gets its money from where? Oh yeas the private sector. So you starve the private sector in order to stimulate it. Good plan bozo.

[austenbosten]

@BarrySlisk that's taxes, but there are other ways a gov't can get money. A) Selling of US Treasuries to either the US or Foreign Markets B) They can just print the money (which is not recommended) C) raising tariffs on imports ...so yeah taxes are not the only way a gov't gets money....Duhhh!!!!! also if it creates jobs and allows people to work instead of sucking off of the govt dole...guess what genius...The deficit goes down!!!!!

[BarrySlisk]

@austenbosten

First, sorry for calling you bozo. I must have been in a bad mood.

It does not matter that much HOW the government gets its money. All money comes from the private sector. So when government takes money from the private sector it destroys productive private jobs. It then uses the money to subsidize less productive jobs (otherwise the private sector would already be doing it).

[austenbosten]

@BarrySlisk First I humbly, gladly accept your apology. (It's rare to see such mannerisms on Youtube)

How does selling US Treasuries to willing investors destroy jobs? I have to say you are falling into the sad pitfall of anarchism that somehow the government has absolutely no uses and if people were left to their own devices this would be a better world. It's a sad naive fallacy that all Libertarians believe in yet there has been no event in history that proves it works.

[BarrySlisk]

@austenbosten

US Treasuries is just debt. Debt has to be paid back with interest. It's paid by taxes which is taken from productive companies or savings. Companies and savings is what grows an economy. Not governments spending money like crazy.

[austenbosten]

@BarrySlisk Savings does not grow an economy. If you have $5 and I have apples to sell, but you just hold on to your $5 to collect interest. Here's what happens:

- My business loses profit, I have to fire workers b/c you are not buying

- I have to close shop b/c you are not buying

- Bank loses money bc no one is buying goods because they are saving

- Bank closes down bc no one is taking loans cause no one is buying finally savers lose!

The transfer of money grows the economy not the hoarding.

[BarrySlisk]

@austenbosten

Without savings you can't grow and expand your company.

And if nobody saves what would banks live off? Saving is the same as investing. You save money by lending it to the bank. Your apple company loans the money to invest in better machines or whatever. Your company can now produce at lower price pr. unit and thus you pay back the loan to the bank with interest. The bank shares the interest with the lender and them selves.

[austenbosten]

@BarrySlisk Banks do not make money on people's savings. This proves your ignorance of basic economics. If you save, the bank has to pay you interest...that's not making money for the banks! It's called the Paradox of Thrift. If everyone saves...who's going to buy the goods? Use your head buddy!!!!!!

[BarrySlisk]

@austenbosten

Oh My God......sigh...

Yes the bank has to pay you interests. That's why they lend your money to others at bigger interest. Thus earning the difference.

By the way, nobody suggest that everybody should save ALL their money and never spend a single penny.We need to live too.

I'm sorry, but this discussion is too basic (ignorant) to hold my interest. There's no chance in Hell I will be smarter by the end of it. And I don't think you will be either and so there is no point. Bye.

[dbill27]

@austenbosten If everyone saves who is going to buy the goods? LOL I'm sure people will save 100% of their money, they wont buy food, clothing, shelter, gas, cars, education. Banks make lots of money on people's savings. WTF are you talking about?

[gergenheimer]

@austenbosten Incorrect. Savings are crucial for sustainable economic growth - saving is deferring present consumption to increase productivity in the future. As for how banking works, if tons of people are saving, it drives interest rates down, which then reduces the incentive to save and increases the incentive to borrow. Conversely, a low saving rate pushes interest rates back up and promotes saving over borrowing. The spread in interest rates between borrowing and saving is how banks profit.

[austenbosten]

@gergenheimer Of course savings are crucial for sustainable econ growth, but that doesn't mean ITS THE ONLY WAY. Neither is consumption, there must be both savings and consumption to grow. If everyone consumed and indebted themselves we would have what we have right now (A weak economy as people have over-leveraged themselves and are trying to pay down debt) however if the opposite occurred we'd have the this(A weak economy as people have over-capitalized and are hoarding for lower prices).

[gergenheimer]

@austenbosten Not true. Over-consumption is a real danger because resources are finite, but under-consumption is a myth. If prices are allowed to adjust, a trend toward massive saving would be met with A) falling interest rates (i.e. lower return on saving and lower costs for borrowing) B) falling consumer prices. This combination of factors would shift preferences back toward consumption. We save because we expect to consume more later. The paradox of thrift is a fallacy.

[austenbosten]

@gergenheimer haha then explain the period from 1929-1933.

[gergenheimer]

@austenbosten Easily. Part of the huge contraction of 29-33 was the inevitable result of the credit expansion (over-consumption) of the 20's. The recession was turned into a depression by Hoover's unprecedented interventions in the economy (his "laissez-faire" faith in the free market is a myth) He ran up huge (by 1930s standards) budget deficits, engaged in stimulus spending, and worst of all, pressured employers to keep wages high. (Remember, I said prices must be allowed to adjust.)

[TiredOldFart]

@gergenheimer No one expects to consume more in the future with saved money than they could have consumed today. There is no way to defer consumption through savings that preserves purchasing power. Conservation of purchasing power requires investing and productivity. Interest paid by banks falls short of matching the decline in purchasing power. This problem is caused by the fractional reserve system that creates money out of thin air. It's the means by which bankers steal from savers.

[TiredOldFart]

@gergenheimer Actually not. Savings is deferring present consumption in order to consume a smaller amount in the future when there is need. When productivity is down, such as it is now, prices increase quickly, interest rates fall due to lack of demand to borrow, and assets seek safe haven in hard assets. Bank profits come from the ability to print money out of thin air and by paying interest rates that leave the saver losing money - the longer he has deposit on account, the more he loses.

[ameshabyebye]

How Deep in Debt Can America Go?

That's pretty much up to the Rothchilds and foreign lenders....and so long as Americans are bogged down with the twin parties and American Idol!

[scout6686]

i like krugman. he's righteous

i studied econ in college and i trust his figures and how he uses them.

[historyboy12]

Japan's national debt is around 180-200% of GDP. No 'run' on Japanese debt or the Yen, yet.

[jeremyemilio]

@historyboy12

90% of Japan's national debt is held by the Japanese in the form of Japanese savings, making a run virtually impossible because the money is sitting there ready to be repaid and owned by the very people to whom it is owed. America's situation is VERY different.

[historyboy12]

@jeremyemilio - If this was the early 1990s, when demography (aging) wasn't a pressing issue, then i would take your view and completely agree with you. However, the Japanese government has confirmed that the Japanese population have, since last year i believe, been net sellers of government bonds. As the population is going to shrink and age, facilitated by the govt's minimal immigration policy and low fertility rates, the govt can't finance its spending anymore. 

[historyboy12]

@jeremyemilio - furthermore, the global reserve currency is the $; this gives the US a unique advantage. Given the only real viable alternatives being very weak: the IMF SDRs and Euro, the situation is not going to change in the near future.

[Steve458791]

I used to respect Krugman a lot more. I think he doesn't see any problem with massive national debt and constantly raising taxes. His economic reasoning keeps getting blinded by his political ideology. The government's role in causing this crisis was a lot more than just deregulating Wall Street. I'm not even a Republican and I can admit that.

[darkmiles22]

Krugman hammered the Bush administration for increasing spending and cutting taxes during good years. Of course he sees something wrong with increasing debt in certain situations. Right now is not the time to be worried about long term debt though.

[evangrogers]

"How far in debt can an advanced country... go before it starts to lose the confidence with investors...?"

NOT MUCH FARTHER, DIPSHIT! I'M BUYING GOLD!!!

[MrDeppness]

Vote Rand Paul and Peter Schiff for Senate 2010! End this madness.

[ProsecuteCheneyEtAl]

Interesting fact. In 1999 the US had a surplus. By 2008 it had three hundred gazillion dollars in debt.

Nothing like war and tax cuts for the superrich to undermine a healthy economy!

Gotta love those Republicans!

[evangrogers]

HA! Classic!! You think republicans are th eonly ones responsible?!

Lemme just ask you to read Article 1 section 10 of the constitution to give you SOME idea of just how deep our problems go: "No State Shall... make anything but Gold and Silver coin a tender in payment of debts"

We're not even supposed to be using paper money BACKED by gold.

There's NO way that our current economic problems can ONLY be blamed on one CURRENT political party.

Thanks for playing, though.

[ProsecuteCheneyEtAl]

First of all, whether or not something is constitutionsl has absolutely nothing to do with whether or not it works. Sometimes suspending habesas corpus works, sometimes it doesn't.. Whether it's ever constitutional is a more important question, but a different one.

Second of all, the Republicans aren't the current political party. But there is no question that both parties are responsible for what happened.

However, the Bush regime was stupid and reckless compared to everyone else.

[evangrogers]

yeah, that Bush regime was pretty bad. No argument there!

The constitution, however, is a GREAT guide as to how we can get out of this mess. Your argument that it can be ignored occasionally is the EXACT reason we have an empire.

Why do we start so many wars, have so much corporate corruption, have HUMONGOUS debts in every sector? These can ALL be traced back to Article 1 Section 10 of the Constitution - Some hot named Hamilton thought that Fiat money would be better than Gold/silver coins.

[evangrogers]

to continue -

why are we being spied on by our federal government, why is there a HUGE black market for drugs, prostitutes and numerous other things? Why is immigration practically illegal unless you work for a major company or have a professorship? Why are there so many taxes?

Pretty much ask the question "Why X" and X= "anything wrong with society" and government, and i bet you can trace it back to someone thinking that they were smarter than the founding fathers' constitution.

[gqh4nhmc]

Never any country with increasing debt was successful. More in debt, more under the thumb of creditors.

1930s. americans was like china, producing, savings got interest, cap on printing currency blah blah. This time around, we see USA collapsing in slow motion.

Wow, i'm witnessing history. . . . .

[Bumgoblue]

As far as the Austrian school, what a joke. The gold standard? Let me get this straight, you want to peg our money to the price of gold instead of a floating exchange rate. (By the way, that's impossible, enough gold doesn't exist.) This also removes our ability to control the money supply, hence influence interest rates to smooth out market shocks.

Real Business Cycle theory is wrong. Please take a class on time-series econometrics.

[davejoe75]

"By the way, that's impossible, enough gold doesn't exist."

You peg your currency to any stable commodity like gold. It's not a 1:1 ratio. The US was on the gold standard until 1971.

Economics is not a science like physics. It's a social science that recognizes patterns in human behavior and the imperfections of humans.

[Bumgoblue]

Nah, Krugman didn't deserve his Nobel Prize. He just developed a theory that improved on one that has been the standard for almost 200 years. His NEG paper has 900 academic citations... 900 individual, published academic articles have referenced his paper. You're right, he's a hack.

[whoo689]

Krugman is perhaps the worst economist I've ever seen. Even John Maynard Keynes and John Kenneth Galbraith made more sense. And yet, THIS guy teaches at fucking Princeton?? For what??? Nothing monumental, I can assure you. He probably had connections. Paul Krugman is more of a political pundit than an economist, really.

[whoo689]

Earth to seahawks: Where we get our goods DOESN'T matter! Economic growth is not biased towards manufacturing. Where do you anti-free traders and protectionists get this nonsense from? Why do you have such fervor for these uneducated, lack-of-degree, low-skill blue collar jobs?? They just give people an excuse to only graduate HS and then say "Well, I can't get a good job anywhere else, but I still have manufacturing to fall back on." It's just dumb.

[whoo689]

Even Paul Krugman agrees that going into a service-sector economy may not be such a bad thing overall. He actually is pretty pro-free trade, relatively speaking. Why do you guys glorify manufacturing so much? WHO CARES??  I'm sick and tired of shielding those workers from the reality of 2009: People change jobs often nowadays, and it's unlikely that you'll keep the job for 50 years down the road. Deal with it.

Instead they whine and ask for more gov't bailouts of automakers.

[BlunderCity]

@whoo689

I think the element you're missing is what kind of manufacturing jobs we're talking about. If you're talking about the high end industry, high value added jobs that Germany and Japan are known for, you're not excatly a greasy blue collar guy with a 50K a year job are you?

So the challenge is to attract the good manufacturing jobs and outsouce the bad ones. That's what Germany has succesfully done (amongst a multitude of other things I might add).

[whoo689]

Krugman's view that we should go further in debt just for recovery is absolutely asinine. As a general principle, we should ALWAYS strive to at least balance the budget. There's no such thing as a free lunch, as Friedman was wont to say. Government is no different. We can keep this national debt crisis going for several more years, but eventually, this bubble will burst.

Government should set an example for all of us and get to balancing the budget and cutting spending.

[whoo689]

My view? Sink or swim. That's called free enterprise. No amount of tampering with the market like Krugman advocates or the extreme version Marx advocates will ever turn America or Europe or Asia's markets into utopias.

[overseachininadoll]

The US has room for more debt is because the US can print money. And it's not your average money. It's the Dollar. But whether the US's a stable Country? Base on the look of the Republican party which's turning into a party of psychopath, I's scared. I have no debt xcpt the mortgage balance which is not much. I would be very very depressed if I'm in debt. Debt is like heavy burden you feel like you can't breath you can't move and you feel less than half a person you are.

[JustCharlie]

$5-6 trillion to play with??

[SailingCedar]

Studio7manga seems to be correct. In '07 the public debt was 60.8% of GDP (flagcounter [dot] com/factbook/us). In the first quarter of '09 the current-dollar GDP decreased 2.9% to $14,097.2 billion and according to the U.S. National Debt Clock we are now sitting at $11,529.9 billion. That's a public debt of 81.8% of GDP.

That's an error in either mine or his part (hopefully mine) of around 37% or $11 Trillion.

[shiatstain]

Who are the idiots defending this douche? DEBT is a chain around your neck. GROWTH comes from SAVINGS and PRODUCTION not from borrowing or printing money. Some of Krugman defenders like semigotbanned, need a brain transplant, no wonder America is in a world of shit, the majority of the people have rocks for brains.

[ObamaTheBlackJFK]

How many people live a life without debt? You? How long have these people had "a chain around their neck?" Try living a life debt-free and save for 100% of house or car before choosing to go into debt.

You are nothing but a mindless parrot for illogical conservative ideologues. It all sounds so very noble but is totally impossible in today's society.

You people need to break out from your bubbles of Reagan ideology and join the "real' world. We all have to borrow or leverage to make money.

[shiatstain]

I have 0 debt. I bought a reliable used car with savings and it lasted me over 10 years. I bought my house with 30 percent down instead of 0. I use my credit card only a couple of times a month. No one said you can go through life without going into some debt but people think debt and savings are the same thing apparently. It's called buying what you can afford and holding off for only the neccessities of life. Howe many people even try doing that?

[ObamaTheBlackJFK]

You borrowed for a home in the hopes of it gaining in value. You couldn't afford to purchase that home at the time. In your own mind, it was a necessary investment.

In Obama's own mind and in the minds of many economists and Krugman with stellar credentials on these matters, the stimulus was a 'necessary" investment.

[ObamaTheBlackJFK]

The money that it all costs is relative to the affordability of you VS all the taxpayers and America's ability to pay off it's debt. China invests in America while your bank or mortgage co. invested in your ability to cover your debt.

Buffett, the richest man in the world, and the most successful capitalist agrees 100% with Krugman on another HUGE stimulus.

These experts VS conservative ideologues? I pick the experts.

[shiatstain]

youtube isn't the best place to debate this subject due to character count restraints. That's too bad,

[ObamaTheBlackJFK]

Yep....too bad for you. You, like the other conservative ideologues I debate on YouTube get pulverized through the basic logic of economics, leveraging, and investing.

Ya all claim the government should be ran like a business, but when it happens you cry foul.

Take your seat in the back of the bus and enjoy the ride. We're in the driver's seat now. It may be a tad bit bumpy for ya all.

[shiatstain]

lmao,

The only thing that gets pulverized is your corn hole.

[evangrogers]

of COURSE corporate leaders agree with Krugman, you dolt! THEY WANT THE BAILOUTS JUST IN CASE!!!

It's Socializing the losses, and privatizing the gains. It's illegal, immoral and anyone supporting it should be murdered. If MY tax dollars stimulate these companies, then i better damn well get something for it! I'm STILL waiting for my free GM car...

Companies SHOULD go bankrupt - it makes them manage Scarce resources better.

[evangrogers]

Actually he probably borrowed for a home because he had a job that could let him repay it over time. I doubt he was a house flipper, like you accuse him of. He most likely WAS in debt, but not really - he had a stable job and was able to plan for the future and pay off the debt.

"Krugman has stellar credentials"... yeah, so did Bush. PWNT

[podunkistan]

@shiatstain

You don't owe anything on your mortgage?

"Howe many people even try doing that? "

Average household debts - especially credit card debts - are deeply skewed by the massive balances of the wealthy. So, probably more than you think. The decline in real income amongst a large portion of the workforce is probably a bigger factor than some perceived irresponsibility.

[MomSaysImCool]

@shiatstain Uumm you're not a state

[XanatharEye]

That's simply not true. For most of Israel's existence it was illegal to lend money at interest to a countryman (therefore no central bank, no reserve bank) and they bare a longevity that flies in teh face of your whacko leftist economics.

[dstauby]

And if you wanna go back to living in tents, have at it. Things have evolved over the past 1000 years. We gave your Austrian school a shot. And it failed horribly. No regulation on the derivatives. Derivatives are the source of the problem. I guess you want to get rid of the fed to? And put the private bankers such as Morgan Stanley and Citi in charge of our currency. Liberals got us out of the first depression, guess we have to clean up another conservative mess.

[funkysnarf]

u are a fucking moron who has no idea of what you are talking about...Austrian economics has not failed....its the denial of austrian priniciples that keeps this process of economice instability going....and FDR DID NOT get us out of the depression! total lie....FDR is the reason the damn depression lasted soo long....read and study before you go running your moron retarded ass mouth buddy....learn economics and study money and you may have hope to someday open your mouth without shit comingout

[XanatharEye]

Capitalism is what brought lazy idiots like you out of tents. And leftist economics did not fix the depression, it made it much worse. see "FDR's Folly" and "30 Questions About American History You're Not Supposed To Ask"

[dstauby]

It's funny, people like you call kenyesians supporters lazy cause you have no arguments that match up with the facts.

Free Market theories used from 1929-1933. Great Depression sinks to the bottomless pit. Kenyesians used from 1934-1937 and unemployment goes from 25% to 12%. 1938 Free Market theories used to balance the budget and cut back spending, unemployment goes back up to 22%. 1939-1941 The biggest government expense starts (WW2) unemployment is at 1%.

Nice try. Try some facts next time.

[davejoe75]

That's not true. Hoover was highly interventionist creating corporate cartels to keep prices high, enacting the Smoot-Harley tariff plus some additional taxes.

Also, until interest rates can float freely without the Federal Reserve intervention, then you don't live in a free market. We're a mixed economy.

[lainieyeoh]

i wonder how many of those coughs in the background were disguised snide remarks from the audience?

[shiatstain]

Krugman is an idiot, plain and simple as that. Plese tell us we need another bubble Krugtard and then deny it. Sorry, you have been exposed fool.

[Epic878787]

Debt is bad. He shouldn't be talking about how much can be added but how much can be paid off. The Treasury should be full of treasure, not debt.

[semigotbanned]

move to Saudi Arabia, retard

every sane country in the world has debt, because they believe in their future and growth

[Epic878787]

Oh? How did that work out for Argentina and GM? Mugabe believed in Zimbabwe's future.

"because they believe in their future and? growth "

What makes you think this is the reason they have debt? Oh yeah, - your imagination, idiot.

They have debt because the people aren't willing to pay higher tax rates and too stupid to vote them out of office. It's largely vote buying, "I'll give you welfare and med. care for free, I wont increase taxes, so vote for me".

[semigotbanned]

if you think that the US is comparable to Argentina, you're a fucking moron

get the fuck out of here, dumb shit

[fillosofert]

Hmm, Mr Krugman, Belgium is not an empire. Americas only hope is that thepowerful countries around the world sees it in their self interest to keep the american empire going.

[semigotbanned]

when will they build microprocessors or operating systems or fucking global search engines with maps and libraries.. ?

it's not only a military empire, it's the mover of progress in every sense

[fillosofert]

Krugman is as wrong is it can get. The United States.will lose political power the more depth and dependent it gets on foreign lenders. Empires collapse when they get into deep depth. The russian revolution, the french revolution, the collapse of the otttomans and the collapse of the Britsh empireall happend when these empires became deep into dept.

Dept is not only a monetary problem. Its a political problem.

[bulluni]

great statement I agree

[mindbackup]

studio7manga: He's talking about net debt...Some of the 11.5 trillion gross debt is owed just to other branches of government.

[studio7manga]

US debt is ~$11.5 trillion the economy is ~14.3 trillion that's 80% of GDP. What metrics was he using?