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Willie Sutton Wept - More Words Of Wisdom From Krugman

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http://www.nytimes.com/2011/02/18/opinion/18krugman.html?src=me&ref=general

There are three things you need to know about the current budget debate. First, it’s essentially fraudulent. Second, most people posing as deficit hawks are faking it. Third, while President Obama hasn’t fully avoided the fraudulence, he’s less bad than his opponents — and he deserves much more credit for fiscal responsibility than he’s getting.

About the fraudulence: Last month, Howard Gleckman of the Tax Policy Center described the president as the “anti-Willie Sutton,” after the holdup artist who reputedly said he robbed banks because that’s where the money is. Indeed, Mr. Obama has lately been going where the money isn’t, making a big deal out of a freeze on nonsecurity discretionary spending, which accounts for only 12 percent of the budget.

But that’s what everyone does. House Republicans talk big about spending cuts — but focus solely on that same small budget sliver.

And by proposing sharp spending cuts right away, Republicans aren’t just going where the money isn’t, they’re also going when the money isn’t. Slashing spending while the economy is still deeply depressed is a recipe for slower economic growth, which means lower tax receipts — so any deficit reduction from G.O.P. cuts would be at least partly offset by lower revenue.

The whole budget debate, then, is a sham. House Republicans, in particular, are literally stealing food from the mouths of babes — nutritional aid to pregnant women and very young children is one of the items on their cutting block — so they can pose, falsely, as deficit hawks.

Krugman once again ramping spending money that isn't generated nor exists. Due to how growth is calculated of course it's going to collapse if the govt stops spending, but govts can't keep spending more than income at some point they will face bankruptcy. At what point is hard to predict, but at some point in time that point will be reached.

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http://www.nytimes.com/2011/02/18/opinion/18krugman.html?src=me&ref=general

Krugman once again ramping spending money that isn't generated nor exists. Due to how growth is calculated of course it's going to collapse if the govt stops spending, but govts can't keep spending more than income at some point they will face bankruptcy. At what point is hard to predict, but at some point in time that point will be reached.

He's 100% correct, the best course of action for a government caught in a recessionary liquidity trap is to spend big.

The problem isn't with his recommendations for what to do right now, the problem is how do you implement the flip side of the neo-Keynesian equation? How do you deal with what comes next? When recovery comes how, in a democracy, do you ensure the government then cuts back on spending and pays down debts?

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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