Comments | the_recession: Paul Krugman on why austerity is a recipe for ten more years of a Depression.

nebris in the_recession

Paul Krugman on why austerity is a recipe for ten more years of a Depression.

May 29, 2012 07:09

By John Aravosis on 5/28/2012 07:00:00 PM

Krugman says we're still in a classic Depression.

Paul Krugman on Bill Maher:
We are in a depression. We are actually in a classic depression. A depression is when nobody wants to spend. Everybody wants to pay down their debt at the same time. Everybody is trying to pull back, either because they got too ( Read more... )

consumer spending, government spending, file under "duh!", depression circa 2009, austerity measures, reaganomics, herbert hoover, austrian economics, economic collapse, john maynard keynes, demand destruction, paradox of thrift, franklin d. roosevelt, 'capitalism', paul krugman, public works projects, the new deal, 2012 presidential election

Comments 22

peristaltor May 29 2012, 21:10:23 UTC

So close, Paul, so close.

My spending is your income. Your spending is my income, so if we all pull back at the same time, we’re in a depression.

Not quite. Where does the original money come from? You're missing something. Which leads to:

The way to get out of it is for somebody to spend so that people can pay down their debt, so that we don’t have a depression.

Okay, but who will do that? Remember, Paul, money is debt. It doesn't exist at all until someone borrows it. Someone has to borrow the money before that money can be spent, which means banks have to be willing to lend it.

They aren't right now. That's a problem. And if they don't start, there will be no money to pay down debt. And if existing debt continues to fail, more and more existing money will *poof!* out of the economy.

I know you don't believe that, Paul, but that doesn't change the way things work.

nebris May 30 2012, 00:01:04 UTC

Of course, all these debates - including the one above - are predicated upon the questionable assumption that Capitalism is still a socially, culturally and ecologically viable construct.

~M~

(The comment has been removed)

nebris May 30 2012, 13:46:26 UTC

Capitalism works until it doesn't, and then it kills its host.

~M~

Thread 9

sinistertim101 May 29 2012, 23:29:07 UTC

Yep ( ... )

Here is more info on Krugman sinistertim101 May 29 2012, 23:34:10 UTC

nebris May 29 2012, 23:58:40 UTC

Fuck the banks and the bankers. They got us into the mess and they each need a bullet in the back of the skull and a shallow grave...as does anyone who supports them.

~M~

sinistertim101 May 30 2012, 00:11:59 UTC

We discussed this before.

Without banks there is no economy. Lines of credit are needed to make payroll, suppliers, and other things to keep the doors open at your business.

The banks are not evil. They are loaning to only the best qualified because of the lack of funds. Countries are a safer bet than people or businesses. They do not declare chapter 11 bankruptcies, they last for centuries and do not die, they have productive capacities and so on.

This is the result of excess debt and as long as these countries keep auctioning off bonds we all get screwed. That is the point of austerity.

Eventually they will have to loan to us and employers again. Then employers can hire and expand. Especially small business who actually is making money but these cheap banks wont loan the capital for a franchise.

But why do that when you can loan to Uncle Sam where it is in the US Constitution that he can't default?

Do not argue we do not need banks. That is not practical.

Thread 14