KRUGMAN: This Is The Chart That Debunks What Everyone Says About The National Debt

Posted by jbaker 11 years, 8 months ago to Economics
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I know we have a bunch of Krugman fans here. :)
I thought this might be interesting to discuss. The link here is actually Business Insider expanding (slightly) on Krugman's post.

The argument made is that, in a country with their own currency and the power to print currency, that long term rates on government securities are a function of expected growth and future interest rates. The argument goes that national debt does not play into it, "credibility" not being an issue because the risk of default is next to nothing.

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  • Posted by khalling 11 years, 8 months ago
    Default is not just getting your money back. It includes the risk of inflation. In the 70s, 1 yr treasury's were yielding 12%. Markets are not always rational. We are risking substantial increases in what we have to pay on our sovereign debt. The government has been lying about the actual inflation rate and the only reason are treasury yields remain low is that the Fed is buying up their own Treasury's. Will it behave seriously and pay it all back or will it not. You can only counterfeit so long. Zimbabwe was also able to print its own money. I wish Mr. Krugman would move there and be their pet economist.
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  • Posted by prop3th 11 years, 8 months ago
    Krugman is small mind in a big ego. Because of him and other recent recipients of the Nobel Prize, being a winner lost any validity years ago. Just because you’re smart, doesn't mean you have any common sense. Advocating for printing more money because you can is a neither ethical, or lucid. It reminds me more of the ramblings of a small child. I want, I need, you buy me. The "looting" point of view is always disheartening to view. Even more so when it come from someone who was considered smart at one time.
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  • Posted by bschnzl 11 years, 8 months ago
    Paul Krugman is proof that truth is stranger than fiction. The ruse: post a nasty looking chart, and say something backing Mr. Thompson. The goal: Pull, pure and simple.

    In the end, banking is a political game. The Community Reinvestment Act was Carter's reaction to natural interest rates in the face of honest monetary policy following the second world war. The depression was over, millions died in the resulting wars, and Americans wanted a clean slate run honestly. We got it up to the 1970s.

    The negro neighborhoods were not keeping up with their counterparts. Asians and
    Europeans were coalescing well and prospering. Racism must have been the cause
    . It certainly was not because of choices made by most individuals in either group. A perfect excuse for wealth redistributive legislation.

    The CRA is a club held over the heads of banking institutions in this country. With this club, growth opportunities are doled out to the better behaved money men. Instruments like requests and permissions are not needed to control men that make their living predicting the value of other mens plans. The CRA is the political club that lets the USA ignore the price of borrowing from our progeny!
    Or, at least it gives that illusion!

    The central bank (The Fed) is the root of all interest in the USA. It is the Charybdis to the CRA's Scylla. In any case, quoting artificially low government controlled interest rates as evidence is double speak in the extreme. This sleight of hand has earned Mr. Krugman a nomination for the Bertram Scudder Lifetime Obfuscation Award!
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    • Posted by overmanwarrior 11 years, 8 months ago
      Krugman is an economic terrorist. His view of the economy is not much different from an obese person trying to lose weight because they joined a gym, but simply sit in their car eating carry-out food from Burger King. Krugman at his core believes that a managed economy is the only economy.

      I've been thinking hard about all this and have noticed that many young people have dropped out of political interest all together and rather spend all their time playing online video games. So what's the reason...............? Video games and online activity are not regulated. The imagination is not captive to the Paul Krugman's of the world in those games. In many ways todays youth are Shrugging. Instead of working hard to start businesses and fight their way up a corporate ladder, they just sit in their parents basement till their 40's playing 'Call of Duty' day in and day out. What is their incentive to do otherwise? Real life is simply too regulated. The computer world doesn't have all these stupid regulations to deal with designed to give people like Krugman a title of respect when in fact he knows little of nothing but broken theories and ancient taboos.
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