Sunday, September 23, 2012

The Return of Depression Economics and the Crisis of 2008 by Paul Krugman

I love me my Paul Krugman, but I just had the hardest time getting into this book. Maybe it is because his End This Depression Now! is more timely, but I was also blown away by the list of things that politicians should distinctly not do and how many of them are actually doing them. Like how you should not try to cut spending and pay off your debt (austerity) when you are still in recession/depression mode (like how Europe/Germany is expecting that of Greece/Spain/Italy). As I kept reading, I felt like this particular list kept getting longer and longer...all these no-nos that the governments are pursuing contrary to economic theory and what really works. Take Paul Ryan, for instance; his plan to cut spending would wreak havoc on the economy like no other, and to implement these changes at a time when more people need them is just ludicrous. But that is what politicians are doing. Some people expect the Fed to do more, and there is only so much Ben & Friends can do to help without actual policy measures (like the JOBS Act) being implemented. In the end, more stimulous is needed to help America get out of this trip. For international matters, Germany needs to chill out and understand that what they are doing is contrary to what should be done and in the end it will bite them. I think I read that it is already predicted that Germany will be back into a recession by the end of this year because of the austerity measures they are forcing on the rest of Europe.

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