Krugman Sees Third Depression

Award winning economist and NY Times columnist sees G-20 Summit Meeting as very disappointing. Imagine Tom Emmer trying to understand this!
by Charlie Leck

I can perform no better service this morning than to send you to NY Times columnist, Paul Krugman, and his recent comments about the disappointing G-20 Economic Summit. He feels the Summit is doing exactly what it should not and is pushing us toward a third great depression that will see long, long-term unemployment and severe economic times ahead. I strongly suggest you read Krugman's column.

Governments, Krugman explains, "are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending."

Conservatives, following this trend, have a tight grip on American politics right now and they are calling for belt tightening, cuts in spending and no new taxes. You'll see why Krugman thinks that is exactly what should not be done.

"It's almost as if the financial markets understand what policy makers seemingly don't: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

"So I don't think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times."

The conservative voice appears to be in control right now and and those who vocalize it have no inclination toward "rational analysis."

Try to imagine the Republican candidate for Governor of Minnesota, Tom Emmer, even beginning to understand what Krugman is talking about!

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