When president Obama was defending his economic stimulus package, he made the statement that 'every economist agrees that we need to act'. Not only is that false, but what he really ment was that he only listens to certain economists like Paul Krugman who advocate increased deficit spending and lowering interest rates in times of economic downturn. This essentially means that we borrow, print money, and increase spending in hard times. If this doesn't make sense to you, don't worry, economics is complicated. Although this is utter nonsense on an individual level, we are talking about macroeconomics here.
It might be a surprise, however, that the only economists who don't believe in free money were the only ones to predict the collapse of the housing bubble. In fact Krugman, a very influential economist of the type Obama takes his policies from, advocated for the inflation of the housing bubble.
Its no wonder that people like this keep telling lay people that keynesian macroeconomics is too complex to be understood by everyone. It is utter nonsense. Everyone knows that the answer to money problems is not to take out more debt and go on spending sprees. Here are more quotes from Krugman.
I like this quote from the first article:
'What is damning about these quotes is not that he necessarily caused anything. What is devastating about them is that they expose the intellectual bankruptcy of his economic principles. Those who look up to him like the second coming of Adam Smith should realize that the neo-Keynesian principles that lead him to advocate aggressive interest-rate cuts and mammoth public spending now, are the very same principles that led him to advocate inducing a housing bubble then. He would himself affirm that his economic principles haven't fundamentally changed since then. So the conclusions and policy prescriptions he infers from them are just as wildly wrong now as they were then.'
When will we stop listening to these quacks?
