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The Lesser Depression (Like 1930's, Krugman)
NYT ^ | 7-21-2011 | Paul Krugman

Posted on 07/22/2011 4:17:04 AM PDT by blam

The Lesser Depression

By PAUL KRUGMAN
Published: July 21, 2011

These are interesting times — and I mean that in the worst way. Right now we’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let’s talk for a moment about why our economies are (still) so depressed.

(snip)

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed.

(snip)

(Excerpt) Read more at nytimes.com ...


TOPICS: News/Current Events
KEYWORDS: budget; debt; depression; economy
The stock markets of the world are up as I post.

Kicking The Can.

1 posted on 07/22/2011 4:17:07 AM PDT by blam
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To: blam
I don't know how any thinking person can even take this moron seriously. By not paying our American Express card with our Visa card we are going to have a depression?? Good grief.
2 posted on 07/22/2011 4:22:16 AM PDT by Perdogg (0bama got 0sama?? Really, was 0sama on the golf course?)
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To: blam
right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets

This is truly the sober, reasoned analysis one would expect of a Nobel laureate.

We all can learn much from this humble sage.

3 posted on 07/22/2011 4:22:25 AM PDT by wideawake
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To: blam
Hmmmm ... a collapsing globe ....

enter antiChrist ,,, stage left.

(I'm goin' home soon)

4 posted on 07/22/2011 4:23:10 AM PDT by knarf (I say things that are true ... I have no proof ... but they're true)
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To: blam
Here's The Latest Press Release From S&P Designed To Scare The Hell Out Of Politicians

Yesterday S&P representatives met with House GOP Freshmen to warn them of financial Armageddon if the debt ceiling isn't hiked.

5 posted on 07/22/2011 4:25:54 AM PDT by blam
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To: blam
The stock markets of the world are up as I post

Once they go down, it's really in the tubes. Consider that 12,500 in the market has the real value of about 9,000. Even as it stays up and the number of dollars increases, our net VALUE is down.

6 posted on 07/22/2011 4:28:39 AM PDT by trebb ("If a man will not work, he should not eat" From 2 Thes 3)
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To: blam
...right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets.

Since the perverted Clinton administration, liberals have become the most vile, psychotic, and truly demented vermin on the planet. Nothing, absolutely NOTHING, is more important to these scumbags than their perverted, historically inept, and disastrous political ideology. Not their children, not future generations... nothing.

7 posted on 07/22/2011 4:29:39 AM PDT by Common Sense 101 (Hey libs... If your theories fly in the face of reality, it's not reality that's wrong.)
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To: wideawake; blam
right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets

Seriously. With blatant anti-conservative demagoguery like that in the third line, this should have had a barf alert. Especially this early in the morning.

Oh, wait, the word "Krugman" in the title DOES mean "barf alert." My bad.

8 posted on 07/22/2011 4:31:40 AM PDT by MWS
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To: blam
Notice how anyone who doesn't toe the liberal line is a "fanatic"?

Notice how while the liberals are constantly warning about right wing violence, the only violence is committed by liberals?

I believe that is called "projection".

9 posted on 07/22/2011 4:31:58 AM PDT by Redleg Duke ("Madison, Wisconsin is 30 square miles surrounded by reality.", L. S. Dryfus)
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To: blam

I just hope that the liberals don’t try to use the same solution to get out of this depression that they used to get out of the depression of the 1930s...a world war!


10 posted on 07/22/2011 4:33:33 AM PDT by Redleg Duke ("Madison, Wisconsin is 30 square miles surrounded by reality.", L. S. Dryfus)
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To: Redleg Duke
A Bankrupt writer at a Bankrupt Paper.
11 posted on 07/22/2011 4:39:18 AM PDT by scooby321
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To: blam; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; calcowgirl; Gilbo_3; NFHale; ...
Krugman Friday laugh ping!

In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let’s talk for a moment about why our economies are (still) so depressed.

The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

Everything might still have been O.K. if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand.

Nor did governments do much to help. Some governments — those of weaker nations in Europe, and state and local governments here — were actually forced to slash spending in the face of falling revenues. And the modest efforts of stronger governments — including, yes, the Obama stimulus plan — were, at best, barely enough to offset this forced austerity.

So we have depressed economies. What are policy makers proposing to do about it? Less than nothing.

The Lesser Depression By PAUL KRUGMAN Published: July 21, 2011

12 posted on 07/22/2011 4:40:17 AM PDT by sickoflibs (If you pay zero Federal income taxes, don't say you are paying your 'fair share')
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To: blam

Cut and Cap are good, Sell needs to be added to the formula.

Tax increases and loss of deductions are not the only tools to raise government revenue.

I am not talking about selling Yellowstone or the Grand Canyon. But the USG is the largest landowner in the nation.

There is plenty of room to privatize obsolete military bases. How about Johnson Space Center.

The Dept of Energy has power generating assets that can be sold.

HUD, Dept of Education, where to start.


13 posted on 07/22/2011 4:41:56 AM PDT by FlyingEagle
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To: blam

The “right-wing fanatics” passed a bill, CC&B, that would provide for an increase in the national debt along with a program to address the underlying fiscal problems in the country. The idiot from Princeton doesn’t like the plan. That’s his right. So come up with a better and don’t blame the “right-wing fanatics” for doing what you say needs to be done.


14 posted on 07/22/2011 5:10:27 AM PDT by Redmen4ever
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To: blam

His first crisis is a first attempt by somebody to finally start dealing with his second crisis, which is of course the root of the problem. His response is to ignore the root and do some minor pruning of the branches.

Very odd line of reasoning.


15 posted on 07/22/2011 5:17:31 AM PDT by Sherman Logan
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To: trebb
Consider that 12,500 in the market has the real value of about 9,000

I agree with you. Anyone who can't understand that the stock markets are in a bubble blown by Ben Bernanke's billions [alliteration anyone?] is beyond hope. Usually, Fed funny money enters the economy through loans to business, but since no one's borrowing or lending, he's had to get it out through the back door.

The only takers have been Wall Street and the government which is thrilled to have Bernanke buy its bonds directly. It takes longer this way, but it eventually does its damage.

16 posted on 07/22/2011 5:26:17 AM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment. -- L. Von Mises)
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To: blam

“...right wing fanatics...”

You rang ?


17 posted on 07/22/2011 5:27:35 AM PDT by Eric in the Ozarks (Eh ?)
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To: Common Sense 101

“nothing is more important to these scumbags than their perverted, historically inept, and disastrous political ideology.”

I submit that your statement could say “economic ideology”. Their political ideology is centralized control over the economy, which puts statists like Krugman in charge of the economy, for his personal profit. The money and the secrets to getting others to accept the control and parasitizatiion of the ruling class is then passed on to their children.


18 posted on 07/22/2011 5:33:48 AM PDT by ngat
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To: Redmen4ever

His ‘plan’ is to spend more. And I don’t mean simply allowing the government to increase the limit. He wants them to increase the level of spending significantly, to the tune of 2 to 3 trillion.

So instead of a 1.5 trillion dollar deficit, he’s advocating a 4 trillion dollar deficit.

This from the man who screamed bloody murder about Bush’s two hundred billion deficit.

Princeton indeed.


19 posted on 07/22/2011 5:38:03 AM PDT by Velvet_Jones
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To: Common Sense 101

Plain and simple: it is their religion.


20 posted on 07/22/2011 5:53:44 AM PDT by amishman
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To: blam

Economic Policy: Nobel Prize-winning economist Paul Krugman says the U.S. is in the “early stages of a third Great Depression.”

If he’s right, it’s only because American policymakers have been following his advice...”

IBD editorial
http://www.investors.com/NewsAndAnalysis/Article/538727/201006281830/Krugmans-Depression.aspx


21 posted on 07/22/2011 6:17:56 AM PDT by silverleaf (All that is necessary for evil to succeed, is that good men do nothing)
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To: Velvet_Jones

Sorry, I was only pointing out that the idiot from Princeton was wrong to say the Republicans, whom he calls “right-wing fanatics” have no plan.

It’s the Democrats who either don’t have a plan or who have a secret plan.

Does Krugman have a plan? First, what would it matter? Anybody can come up with a plan. But, in the real world, you have to work with others. As an entrepreneur, you have to sell your plan to investors. In politics, you have to fashion majority support for your plan.

Second, as you point out, Krugman’s plan is idiotic. I think it questions whether he has succumbed to mental illness. Have you seen him on PBS? He looks deranged. He is beyond opinionated and is arrogant and disrespectful of others. He uses his Nobel Prize in economics (for the implications of imperfect competition for international trade, which, by the way, I love) as a bludgeon, when other Nobel Prize winners have addressed the economics of deficit spending in ways that differ from his and roughly accord with the principles imbedded in the Republican plan.


22 posted on 07/22/2011 6:33:17 AM PDT by Redmen4ever
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To: sickoflibs; blam; ding_dong_daddy_from_dumas; DoughtyOne; calcowgirl; Gilbo_3; NFHale; mkjessup; ...

Krugman just bought my old business....

Jim Bobway’s Currency Exchange


23 posted on 07/22/2011 6:40:18 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: blam
The antidote to the poison Krugman spews from his computer keyboard:

Krugman-in-Wonderland

24 posted on 07/22/2011 6:44:45 AM PDT by logician2u
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To: sickoflibs

Beam him up, Scotty!

Or maybe this guy is in another galaxy and he needs to be beamed down.

Oh jeez, did you see that? The Mad Hatter just went through the room, the tooth fairy will come tonight to leave me lots of money and I have a bridge I’ll sell ya cheap.


25 posted on 07/22/2011 7:38:58 AM PDT by dools0007world (uestion)
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To: blam

Krugman = JournOlist = fraud


26 posted on 07/22/2011 7:44:29 AM PDT by demsux (Obama: THE job destroyer)
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To: demsux

Love it. krugman describes the plan to quit borrowing, reduce our debt and strengthen our financial position to be the action of right wing fanatics.

So when krugman gets let go from the Moscow times, I would bet that he quits borrowing, reduces his debt and strengthens his personal financial position.

That would make krugman a right wing fanatic.

Pissin in the wind just gets you wet there nobel prize goofball.


27 posted on 07/22/2011 7:50:35 AM PDT by Texas resident (Hunkered Down)
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To: stephenjohnbanker

Can I borrow a few thousand?


28 posted on 07/22/2011 8:30:22 AM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are...)
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To: trebb

>>Consider that 12,500 in the market has the real value of about 9,000.<<

Thank you for the good news. I was figuring it was below 8k by now.


29 posted on 07/22/2011 8:32:51 AM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are...)
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To: B4Ranch

Why? You wanna buy a pack of gum?

;-)


30 posted on 07/22/2011 8:48:29 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker

I was hoping to take Momma out for dinner.


31 posted on 07/22/2011 8:53:57 AM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are...)
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To: B4Ranch

Then you need more.... 10,000 Zimbabwe dollars = one chicken leg.


32 posted on 07/22/2011 9:26:28 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker

Mortgage the house again. I’m getting tired of this.


33 posted on 07/22/2011 9:50:56 AM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are...)
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To: blam
Our nation is borrowing 40 cents of every dollar we spend. The “right fanatics” think this is not a good idea.

And they are to blame for financial markets having concerns with our nations borrowing?

34 posted on 07/22/2011 9:57:08 AM PDT by HereInTheHeartland (I love how the FR spellchecker doesn't recognize the word "Obama")
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To: B4Ranch

Don’t mortgage the house! Merely steal your neighbors wallet......it’s the “ Obama Way “


35 posted on 07/22/2011 10:20:29 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker

Is that what they mean by “sharing the wealth?”


36 posted on 07/22/2011 12:37:58 PM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are...)
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To: B4Ranch

Yeah.....or like when Huckleberry Finn “ borrowed” something ;-)


37 posted on 07/22/2011 1:14:57 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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