According to liberal economic Paul Krugman, a “third depression” will occur if nations tighten their belts and attempt to balance their budgets.
Forget about the riots in
In his June 28 column for The New York Times , Krugman wrote: “We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.“
At the G-20 meeting in
“And this third depression will be primarily a failure of policy,” Krugman continued. “Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.”
Krugman has rarely been concerned by government debt, unless it was for a war or could be used to bash former President George W. Bush. Maintaining his spendthrift perspective, he insisted the concerns raised over government spending have nothing to do with a genuine concern for the financial insolvency of the government or the threat of runaway inflation, but were part of an irrational “orthodoxy.”
“So I don’t think this is really about
For 2010, the federal deficit , as a percentage of
Over the past couple years, Krugman has been an outspoken advocate of government stimulus spending, criticized a $775 billion stimulus plan for being too small , called for a second stimulus , and even claimed in 2008 that “we probably have $10 trillion of running room ” when asked how much the government could spend to turn the economy around.