The Economic Argument Is Over — Paul Krugman Has Won

[The Ghost of Championship]

Originally Posted by mcsluggo

what krugman and others argued is that in times of economic crisis the adverse effects of debt are secondary to the more pressing adverse affects of the recession itself .... and also that a governmetn in free fall accumualtes debt no matter how austere they try to be, as teh economy crashes.... so your choice in 2008 really was... accumulate debt to try to soften the recession, or let the recession crash the economy AND THEN accumlulate alot of debt AFTER the economy is in ashes.

Or simply in real terms as deflation causes the debt to double, then quadruble, then go to Weimar War Reparation levels, then go to infinity.