Free Markets, Free People

Quote Of The Day

It comes from Paul Krugman

So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.

Is it? Or is it a false premise?

Who said we were headed for a “second Great Depression”? And how does a non-falsifiable claim prove the point that “Big Government” saved us from anything?


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13 Responses to Quote Of The Day

  • And there are some economists who think we are in for a double dip, or even multiple dip, recession.  Think of the ‘lost decade’ crowd here.  Now if it should turn out that they are right will Krugman blame big government for it?
    I wouldn’t bet on it.

  • As the market rebounds, the large number of people who left the job market will return, returning them to the ranks of the unemployed.  I figure that by the end of October, we’ll see double digit unemployment as those people remain unable to find work.

  • “But in two years the recession will be over. And the myth will grow up—rather similar to the ones about FDR and war expenditure—that Obama did it. Essentially, Obama will get credit for the self-adjusting character of the economy. I reckon we should start preparing that other face of Mount Rushmore.”
    Reason magazine, May 2009

  • It was Bush’s attempt to buffer the decline after the dot-com boom that helped make the real estate bust as bad as it was.  Does Krugman really think that making the same mistake on a much bigger level will have any other result?  The economy appeared to have recovered very nicely after the recession in the early aughts.  When Georges Santayana made his statement about repeating the mistakes of history, I wonder if he ever thought that it would apply over a period shorter than eight years.

  • Paul Krugman – “So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.”

    1. Did Krugman predict Great Depression v2.0 at any time?

    2. Didn’t CBO predict that the recession would end by late ’09 EVEN WITHOUT Porkulus?

    3. Wasn’t the party line a month or so ago (i.e. before the 0.1% drop in unemployment that CLEARLY signals the end of the recession /sarc) that we hadn’t given Porkulus enough time and that it wasn’t even intended to “stimulate” the economy in the first place?


    Krugman’s “argument” is laughable, so full of caveats and exceptions as to be worthless. It seems to me the feeble effort of a man seizing on a single data point (that even he admits is probably a statistical fluke) as proof positive that Big Government is wonderful, and that anybody who doesn’t like it WANTS a depression.

    This is what passes for great thinking on the left.

    These people are morons. Why the h*ll does ANYBODY listen to them???

  • Its not over. Interest rates haven’t risen even a quarter of a percentage point yet. But they have to. With trillions of dollars of debt and unfunded liabilites, we are going to have to entice more bond-buyers with higher interest rates, especially since all of this stimulus being paid for by printed money and everyone is worried about inflation. Oil and food prices won’t stay depressed forever. The dollar is sliding faster than it rose during the market crash. This recovery is being fueled by debt and consumption, the same as before. When rates rise the bubble will burst, or we else we get hyperinflation. Take your pick.

  • Short term benefits from the stimulus and the program to promote car buying is having a positive impact.  The trouble is, this is a structural economic problem created by high debt and an unsustainable current account deficit.  Those structural problems have not been solved, and if good policies aren’t undertaken to bring the debt under control and re-structure the economy, this is a minor upswing in an otherwise perhaps unstoppable decline.  It may be enough now to keep the Democrats in power and give Obama a second term, but if they don’t solve the deeper problems, his long term legacy will not be good.

    • Yes, Erb. Eight years of single-party rule by the people who massively expanded deficit spending will reduce the deficit. Rock-solid logic as always, Erb.

    • Also, regarding “cash for clunkers” boondoggle: On balance, it is only going to hurt automakers because it will cause a reduction in demand in the mid-term. The program was never going to make people buy more cars, it could only shift the timeline on which they bought them. The French and the Germans did this exact same thing, and both found out it was worse than doing nothing.

  • Well, note that historically the Republicans are the ones who massively expand the deficit.  But, “J”, you seem to not be reading very carefully.   I did not say Obama will reduce the deficit, I said that if they do not, then the economy won’t recover.   I am not optimistic that Obama and the Democrats will make the necessary changes.   So you read something into my comment that clearly was not there.

    • Well, at least part of the rationale for Republicans running large deficits was the theory that it would prevent spending increases. Pres. Obama blew that premise out of the water with his first budget, so I guess we’ll see how that works out for him.

  • We’ll see…right now Detroit is really lovin’ it!

  • Run deficits to stop spending increases?   That is like destroying the village to save it.   Well, the US economy may be collapsing, it might be that there is no solution but getting used to the fact that our day in the sun is ending, thanks to our militarism and inability to handle our finances.