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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPaul Krugman- Debt is Good
Rand Paul said something funny the other day. No, really although of course it wasnt intentional. On his Twitter account he decried the irresponsibility of American fiscal policy, declaring, The last time the United States was debt free was 1835.
Wags quickly noted that the U.S. economy has, on the whole, done pretty well these past 180 years, suggesting that having the government owe the private sector money might not be all that bad a thing. The British government, by the way, has been in debt for more than three centuries, an era spanning the Industrial Revolution, victory over Napoleon, and more.
But is the point simply that public debt isnt as bad as legend has it? Or can government debt actually be a good thing?
Believe it or not, many economists argue that the economy needs a sufficient amount of public debt out there to function well. And how much is sufficient? Maybe more than we currently have. That is, theres a reasonable argument to be made that part of what ails the world economy right now is that governments arent deep enough in debt.
I know that may sound crazy. After all, weve spent much of the past five or six years in a state of fiscal panic, with all the Very Serious People declaring that we must slash deficits and reduce debt now now now or well turn into Greece, Greece I tell you.
But the power of the deficit scolds was always a triumph of ideology over evidence, and a growing number of genuinely serious people most recently Narayana Kocherlakota, the departing president of the Minneapolis Fed are making the case that we need more, not less, government debt.
more
http://www.nytimes.com/2015/08/21/opinion/paul-krugman-debt-is-good-for-the-economy.html?ref=opinion&_r=0
KingCharlemagne
(7,908 posts)jeff47
(26,549 posts)bluedigger
(17,086 posts)"David Brooks is off today."
JHB
(37,161 posts)And could only think "but he's off every day. When has he ever been 'on'?"
bluedigger
(17,086 posts)hifiguy
(33,688 posts)Sigh.
The latest incarnation of "what a stupid person thinks a smart person sounds like."
An inflamed boil on the buttocks of the NYT; one that needs a speedy lancing.