Sometimes I write what amounts to a blog in somebody else's blog. This time, when I did that, I decided to bring my thinking here as I had been writing on this also in a personal series of conversations with someone else who follows the economist Paul Krugman and believes in his economic theories.
Now I don't know if Krugman is right or wrong about a capital D Depression coming without all the governments in the developed world increasing their spending, but what Krugman wants to do is increase our own debt massively as a way to stave off that capital D Depression. He is putting out a lot of fear talk for if it doesn't happen. Well whether a Depression would be coming anyway, one of the ways to bring it on is with fear talk. He is doing his part to instill that. If people are already hoarding, will that decrease that happening?
Then too a lot don't realize how debt can impact small/little/ordinary/______ people (I swear these days no matter what you say, you offend somebody). If the US accrues more debt, does it also increase the money supply so that those savings someone is hoarding goes down in value? With SS locked in with the claim there is no inflation, those people, along with those on fixed incomes are just plain stuck when dollars decrease in value, and we all know that has already happened. Remember a dollar loaf of bread. Try finding one today!
Some blame Obama already for the debt the US has even though most of it was accrued in the eight years before he took the reins of power. In this political climate where he is accused with hateful drawings on signs of being a communist, a socialist and basically anything bad the sign holder can come up with, in that kind of atmosphere, what would happen if he followed Krugman's advice and started a CCC type program? The crazies would erupt with calling those work camps.
Not that I have anything against CCC type programs. During the Depression, they created a lot of structures that we still enjoy today but is this the same kind of era? Do the people out of work today have those skills? If we did something like that instead of Unemployment checks, how would that go over in this political atmosphere? What would Fox say?
Right now Krugman wants the states bailed out but what had those states done to get into their problem? What if what they did was going to just come right back? Krugman claims debt means nothing but he is basing that on the assumption that the economy will bounce back and when it does, the money can then be paid down.
Krugman is an idealist, which is fine for a writer, but not so great in a politician in my opinion. Listen to him at a seminar but don't let him take our country down an unproven path (and despite his trying to equate it with the Great Depression, that was a different time and only definitely taken out of it by a worldwide war). To me to accept idealism as political truth is to ignore the practical. He expects a perfect scenario to play out. Life doesn't act so tidily. If we had had a perfect scenario, we'd not be where we are now.
In my opinion, he is stirring up enough fear that maybe he guarantees his prophecy will come true and he ends up being considered a great guru. He is doing us no favors right now though and before I would also support hugely increasing our debt, I'd have to hear a lot more opinions. I think as it stands, it would send us into even worse political turmoil and isn't it bad enough. Worse, it might not work and where would we be in two or three years with that debt and still not those jobs?
Farm Boss works with start up companies and hears the talk from those who invest in such. A LOT of money is out there but it's being held waiting for something, I guess. That money could be out getting new ideas developed, working with entrepreneurs, but if it isn't, if it waits for a government bail out or guarantee, what does that say about the innovative spirit of Americans? They wait on their government for everything? It is beginning to look that way.
If you want to read more of what I said and the question that inspired it, it's at: ]Economic Minefield].