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Paul Krugman has been promoting his book "End This Depression Now," which means he has been on a myriad of radio shows.  I've listened to at least ten interviews that are available as Podcasts on ITunes - The Commonwealth Club, London School of Economics, Brian Lehrer Show, FORATV, The Business in Ireland, HARDTALK in England, Real Time with Bill Maher, and Free Library.  He's been badgered and bullied and yet he presses on.  While I don't stand in his shoes, after listening to hours of interviews I have some sense of what he is going through and the patience he has exhibited.  He's a hero to push back against The Stupidity.  Austerity in the middle of a liquidity trap will make the economy worse.  It isn't debatable and is akin to the arguments about evolution and climate change.  

       

We need to give him some help.  He can't do it alone.  So, for the next week make it a point to tell at least one person each day that the three things to improve the jobs picture include fiscal stimulus via aid to States, allow inflation to increase 2% points, and mandate that Freddie and Fannie allow refinancing of mortgages where the homeowners are current in their payments but have no equity.

Krugman is on the road taking the heat for us and it seems to me we should step up for him.  No man can take on The Stupidty alone and he needs our help.  (If you don't understand the economics, listen to his Commonwealth Club speech.)

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Comment Preferences

  •  Ideas need work (0+ / 0-)
    So, for the next week make it a point to tell at least one person each day that the three things to improve the jobs picture include fiscal stimulus via aid to States, allow inflation to increase 2% points
    Aid to the states just perpetuates the status quo and is doesn't really "stimulate" anything.

    We need to some how get the states more in line with what their revenues are. It''s been 4 years now, and it is time to move past the "keeping them afloat" stage and into the next phase of how do we get them sustainable.

    That is part of why the stimulus underperformed in 09. A good percentage of the package was just state aid to keep things stable. Spending a couple hundred billion to keep things as is does little to stimulate an economy.

    I was for helping out the states in the worst of the crisis, but enough time is passed now that they need to start governing themselves and dealing with their debts if it is still an urgent issue.

    Consider it stabilizing a trauma patient. That part is over now, and it is time to begin the recovery stage, which in this case means getting their houses in order to reflect the new reality of this economy.

    As far as the inflation thing, that is a losing argument.

    No one cares what the government numbers say about inflation because no one believes them.

    Anyone who has been to a grocery store knows there has been significantly higher than 2% inflation. If not through outright price increases, then by the incredibly shrinking packages and portions.

    Gas at $3.60 and over $4 for alot of the year is all the inflation anyone is interested in.

    The government calculation may strip out food and energy, but working people don't have that luxury. We already have plenty of inflation to deal with on the crap we actually use.

    Fannie and Freddie have a responsibility to the tax payers to minimize losses. Any program they want to undertake that doesn't blow a hole in the budget or add to the debt beyond normal operations is fine.

    Don't want to be a wet blanket, but these suggestions seem to equal alot of new debt for the government, and higher prices for people that are already strapped.

    If we are going to do another round of stimulus, it needs to be for something tangible we can point to as justifying the price tag. That was a large failure of the last one.

    State aid spending just kicks the can down the road and doesn't deal with the underlying problem. It is not a political winner when people see the price tag.

    •  Targeted aid to states (8+ / 0-)

      will help, if the funding is tied to specific projects, hiring, etc.

      Some GOP governors may refuse, but they'll pay the price at the ballot box.

      As for new debt for the government, Krugman himself makes a case about that.  Borrowing is cheap right now and job creation means increased revenues for the federal, state and local governments.

      Right now, voters want jobs, jobs, jobs.  We need to deliver them any way we can.  If the GOP wants to vote against it, let them.

      It's time for Dems to distance themselves from the GOP. Economic recovery and jobs are a great place to start.

      "We must not confuse dissent with disloyalty." Edward R. Murrow

      by Betty Pinson on Wed Jun 06, 2012 at 08:36:37 PM PDT

      [ Parent ]

    •  you're wrong (9+ / 0-)

      State aid is of the up most importance right now. We have lost 500,000 educators since 2009 and that is directly related to budget cuts across the country on a state and local level.

      Stop being a deficit terrorist. You terrorists whine about how much money is being spent and whine about taxes and say people won't be happy. Well people aren't happy about a lot of things and the government spending money is not high on the list. If their kids have smaller classrooms then the people won't mind paying, if the lines at the DMV move quickly they won't mind paying, if the roads have few potholes they won't mind paying.

      Stop being a deficit terrorist.

      As a nation, the U.S. consumes the most hot dogs per capita. So you'd be wise to never underestimate our powers of denial.

      by jbou on Wed Jun 06, 2012 at 08:54:20 PM PDT

      [ Parent ]

    •  The Nation Convinced FDR To Rein In Debt in 1937 (9+ / 0-)

      which he did, plunging us back into depression till the world war spending started ramping up, as Krugman has explained some years ago.

      WW2 was about 10x the New Deal hiring/spending level, which proved the labor and the whiney liberals correct as they have always been, that the New Deal hiring/spending should always have been much much greater.

      OK so after we hired 15 million workers to march around the planet digging ditches and then filling them in again, bought millions of tons of armaments, food, fuel, vehicles, vessels, planes, R&R entertainment support, and everything else, we won the war and despite actually taxing the rich to pay for it, we were in major debt country.

      Well what do you do when you end up after a depression and war in huge debt?

      Why, by golly, you pile on the debt. Spend a brazillion taxpayer dollars paying the 15 million government short-term troop workers leaving the government payroll, to go to college and buy houses.

      But wait --there's more!

      Spend another brazillion government dollars to help your just-defeated enemies and allies to rebuild, across Europe and Asia.

      Now that's some serious debt creation. Still I think even worse than we've done today.

      Making us the global superpower and creating the only significant sized middle class around the world that humanity ever knew.

      "Madam, there IS no second" as the aide informed the Queen whose nation lost the 1st America's Cup race. Nothing in human history compared to what we accomplished with so-called debt.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Wed Jun 06, 2012 at 09:04:34 PM PDT

      [ Parent ]

      •  how un-gilded age of FDR and Krugman :) (1+ / 0-)
        Recommended by:
        bfitzinAR

        In case a wannabe pLutOcRAT comes after you, reassure them that it really was the free market that saved the world with a little help from a patriotic bunch of civil servants who printed some paper. States and communities need to partner with NGOs and have a blowout WPA style birthday party with Uncle Sam, let's do this thing!

        "O you can't scare me, I'm sticking to the union" - Woody Guthrie from Union Maid

        by dkosdan on Thu Jun 07, 2012 at 02:06:20 AM PDT

        [ Parent ]

    •  You're wrong on the debt thing. (3+ / 0-)

      Unless government provides enough debt-fueled stimulus to kindle a recovery, everything else about the economy is fucked. The ongoing 'silent' costs of mass unemployment, depressed tax receipts, public assistance, disintegrating infrastructure and failure to invest will explode future deficits far more than government spending ever could. Not to mention the colossal cost in human suffering.

      Greece, Spain, Ireland and Great Britain already provide crystal clear examples of the self-defeating folly of austerity. When in a depression, less government spending paradoxically means higher deficits and more debt.

      •  And you're wrong on the debt thing :) (1+ / 0-)
        Recommended by:
        Ralphdog

        We can do the stimulus without increasing the debt.

        We both agree that we have a lack of demand in the economy, right?

        One way for government to create the needed demand to close the output gap is to increase deficit spending.

        Can we also agree that the rich and corporations are sitting on $trillions, that are sunk into U.S. Treasuries, or into derivative products?

        The trick is to use tax policy to either force those dollars to get to work in the productive economy, or have the government take those dollars and invest in the infrastructure of the future.

        But with the obstructionists repugs, we probably won't get either.

        •  Quite so; R's won't permit taxing billionaires (1+ / 0-)
          Recommended by:
          pollwatcher

          ...or reinstating a sane estate tax to get some of those colossal piles of cash back into circulation. They won't permit closing the gaping holes in corporate tax law.

          What's left? Oh, right. Republicans don't like deficit spending either. Except when, you know, Republicans do it. Then 'deficits don't matter'.

    •  Silliness (0+ / 0-)

      The arguments you make are the silliness Krugman has had to continue to confront.  We are in a balance sheet recession and the only way we are going to maintain growth is through government spending.  Perhaps "stimulus" is misleading. Call it propping up aggregate demand while people fix their balance sheets.

      In terms of your comments, inflation is less than 2% and borders on deflationary.  Admittedly, gas prices fluctuate but there is no evidence that the debt has caused gas or food prices to rise or fall. Despite the Fed tripling their balance sheet, there has been no inflation, which is in contrast to what "classical economists" have stated would occur.  If you had been alive during the 1970's you would know what inflaction looks like.  Fluctuating gas and food prices is not inflation.  Frankly, the danger is deflation and not inflaction.   Whether increasing inflcation is a "losing argument" or not isn't relevant to me.  Doing what is right is what matters, and increasing inflaction to 4% would help.  My recollection is that this was the average rate during Regan's second term.  

      Getting our deficits in order in the middle of a Depression is the dumbest thing a policy maker could do.  Yes, of course our deficits are a problem, but austerity in the middle of a Depression will make the Depression and the deficit worse.   See England, Spain, Greece, Italy, Ireland, etc.

      The situmulus worked.  Only today, Harvard came out with a study confirming that 80% of all economists agree that the stimulus worked.  My view was that it was too small, too short, and was funded in large part by tax cuts that are less efficeient than spending.  

      I see no risk loosening the rules for those underwater in their mortgage who are current.  What's the risk? They are already current and refinancing would make their payments less.  Is it likely they would suddenly default after their monthly payment is reduced?

      You seem to think the worse of the crisis is over.  Tell that to the eleven million not working and the four million out for a year.  It's not over.

      In some sense, you buy into the austerity argument.  I suppose you can believe anything you want if you ignore the evidence.  The problem is that when you ignore the facts and the evidence the results don't end well.  

      If you don't like Krugman, take a look at Richard Koo, who has a couple of his talks on Youtube.

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