Paul Krugman - High Risk of Deflation Ahead

Have you read the reviews on Krugman's new book yet? http://www.amazon.com/gp/product/B004J8HXGS/ref=as_li_ss_tl?ie=UTF8&tag=t...


A depression is an extended period when the economy does poorly. There is a constant risk of deflation and unemployment remains high. We have just experienced only the 3rd global financial crisis. Unless we change policy, it is guaranteed that this will continue.

The mood is very important. We shouldn't worry so much about the budget, it definitely isn't a top priority. If a worker has been out of the work force for 3 or 4 years, it will be very difficult for him to get a job. If we don't deal with this now, 7 or 8% unemployment could become the norm. We came into this crisis with 2.5% inflation, which was good. Now we are experiencing a 1% inflation rate, and it could go negative. The problem with deflation is that saving becomes an attractive option to them.

If we don't spend more money, we will continue to experience high unemployment. The government can currently borrow at 1.7%. Borrowing money now is extremely cheap, so the government should borrow more. It can help our economy tremendously in the short term. There is no need to worry about the fiscal deficit.

Category:

News & Politics

Tags:

• Paul Krugman
• Princeton
• Ben Bernanke
• Obama
• liberal
• conscience of a liberal
• economist
• nobel prize
• Investing
• Treasuries
• Gold
• Silver
• Dollar
• Federal Reserve
• inflation
• interest rates
• capitalism
• free markets
• deflation

[stronghold10a]

LOL. I won the nobel prize in the same year that the bubble that we wanted burst... In the same year that obama won the nobel prize. What a joke....

[PennySnap]

People still listen to idiots barking this garbage? I would have thought this way of thinking would have been totally discredited by now.

[BradODonnell]

@marksuave25 Didn't work? Are we still in the Great Depression from the 1930s? I was unaware!

[Elmgren76]

wait, is someone actually still listening to this hack?

[marksuave25]

Krugman is so incredulous. We've done a huge stimulus back in the 30's didn't work. If we did what he wanted we would just be more in debt and just very slightly better off. His school of theory is bankrupt. Everyone should read about Austrian economics and gain some understanding.

[BarrySlisk]

I wanted to listen to the other guy as well. Thumbs down.

[atchisrj1]

Krugman is an assclown.

[AmadeusStatisitician]

@world2explode2moro He is a complete clown, that is all.

[world2explode2moro]

Krugman argues that people will spend their money if there's inflation.

What if you need to save it for a rainy day? does he think we all earn enough money to just spend it all? People who want to save money with high inflation will just invest in tangible asset like gold, he must know this.