Under the ominous heading of "That 30s Feeling" Krugman opines that austerity in response to the woes of the Eurozone is wrong :
How bad will it be? Will it really be 1937 all over again? I don’t know. What I do know is that economic policy around the world has taken a major wrong turn, and that the odds of a prolonged slump are rising by the day.
But just last month he wrote:
Consider what Greece would get if it simply stopped paying any interest or principal on its debt. All it would have to do then is run a zero primary deficit — taking in as much in taxes as it spends on things other than interest on its debt. But here’s the thing: Greece is currently running a huge primary deficit — 8.5 percent of GDP in 2009. So even a complete debt default wouldn’t save Greece from the necessity of savage fiscal austerity.
I reply:
Note your use of the word necessity here, Paul. Why is this necessary? Why not put the failed global derivatives bucket shop monstrosity through bankruptcy reorganization and return to a Bretton Woods fixed currency model based upon long term investments in infrastucture and rapid development of advanced technology to sustain the world's population? Oh, I forgot. You are a monetarist at heart and believe in the magic of...money. That is sad.
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