Keynesian aficionado Paul Krugman is out with another article today which claims we are entering a third depression because policy markers are not spending enough money to support growth. Apparently the US running 1 trillion + deficits for the foreseeable future and money printing by the Federal Reserve is not enough. You see when you have the Keynesian disease as Krugman does money printing and deficit spending are considered good and proper. Because after all, it kicks the can down the road until you end up like Greece which ran out of time (do we really want to end up like Greece?). Politicians love inflation and irresponsible spending because the majority of the population have no idea what inflation is (including the financial community) and love getting "free stuff" from the government. You can temporarily live in bizarro world where there are no consequences of your actions. Hey it worked in Greece for quite a while but when it ended it ended in the blink of an eye.
Krugman tries to play the beneficent economist who is worried about the workers of America and demands that money printing accelerate to help the people. No matter that inflation has destroyed the middles class as wages adjusted for inflation remain stagnant for 40 years. The Krugman (Keynesian) solution of course was to get the desperate population addicted to debt (mortgage debt, credit cards, HELOC) which temporarily helped families maintain their lifestyle without more income. But then of course we have the housing bubble created by the Federal Reserve (following Keynesian principles) which put the final nail in the coffin of the US middle class. Today you now have debt slaves who owe $500,000 to the bank when their home is only worth $300,000. Don't worry though, Krugman and his Keynesian lunatics have a solution for this: inflation. If they can debase the purchasing power of the dollar enough, it will wipe out the majority of debt in the economy and magically allow consumers to releverage again with another fantastic credit bubble. It's going to be one hell of a ride.
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