More perspective on the debt

OP-ED: Till Debt Does Its Part, By PAUL KRUGMAN, New York Times, August 27, 2009

Amidst all the legitimate hand-wringing over the ballooning deficit and projections going forward, some perspective worth reading from Krugman.

Comments

[Steven J.]

Partisan Right will have a field day with this one. But Krugman is correct on this. His latest book 'Return of Depression Era Economics' lays out every major financial crisis from Great Depression, Tequila Crisis, Asian Crisis and so on.

You just don't try to balance the budget, increase taxes and halt spending in the face of a global recession. Been there, done that and history shows the results.

When a business buys a new building, do they expense it out in one year? Well, that is how the Federal Government keeps books.

The largest "spending" to date has been the asset purchase of investments to save the credit function. And the deficit will look horrible till that is paid back.

[R. Miller]

I agree with Krugman that deficits aren't the problem. How the deficits are created is the issue. I haven't seen the job creation in the stimulus. Additionally, I remember Krugman just a few months ago, railing against the Bush administration for the now modest deficits he created. I just wish he were consistent.