Paul Krugman: 'Strong Chance' U.S. Economy Will Worsen

The New York Times:

Earlier this week, the Federal Reserve Bank of New York published a blog post about the “mistake of 1937,” the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post’s author (with whom I have done research) points out, economic conditions today — with output growing, some prices rising, but unemployment still very high — bear a strong resemblance to those in 1936-37. So are modern policy makers going to make the same mistake?

Read the whole story: The New York Times

Comments

[LickDaCat]

04:53 PM on 07/09/2011

Of course the economy will worsen, that is the plan of the Rothschild Banking Mafia who orchestrated the coup which started with the murder of JFK.

The only way the destruction of the USA will be stopped is to abolish the Federal Reserve. The Treasury Department must issue our currency as stated in our Constitution, JFK tried to change this and paid with his life.

With total control over media by the Rothschild Mafia who owns the Fed that has been paying the MSM billions every year to brainwash Americans with lies and propaganda it will be impossible to take back the government from the banksters. The congressional leadership is so corrupt that they will block any attempt to remove Rothschild's grip on congress and the other branches of government.

[John Malloy]

04:22 AM on 07/10/2011

Nothing you just said makes sense.

[LoneTree]

03:16 PM on 07/09/2011

I absolutely guarantee you that the economy is going to get worse, and it doesn't matter WHAT the government does. The economy is terminal, the only question is whether a Phoenix will rise from the ashes. Industrial output in the US has doubled in the past 30 years while industrial employment has dropped by a third, and wages have been stagnant. This is NOT some enormous conspiracy by the rich and powerful. It is as impartial and dispassionate as physics. Industrial automation has advanced so stunningly that the use of humans in industrial production is becoming less and less economical. Human labor in support of Industrial Revolution processes is no longer required. Humans are becoming obsolete in the production of wealth, therefor humans receive an ever decreasing share of the proceeds.

The federal government has been on a non-stop 30+ year campaign of Keynesian deficit stimulus spending and it hasn't worked because it cannot work. We have the debt to prove it (war spending, eg; WWII, are every bit as stimulative as paying for day care centers) but the jobs have never "come back". They never will, they are gone off the face of the planet.

The poster would be doing a far more valuable service for the nation if he were to describe this Phoenix that might arise from the ashes.

[NYC80]

10:33 PM on 06/11/2011

I know that since 2008, now instead of getting a president that would clean corruption he decided to fill the treasure dept with more Goldman rats. How you will get a new direction in this economy when the same rats that caused the problem are in charge of the economic policies.

[muck-raker]

05:22 PM on 06/06/2011

the rumours are that the Fed will once again devalue our money with QE3. the result of this is that everything you buy will soar in price...gasoline, FOOD. Every time the Fed floods the markets with dollars printed that have no backing outside of a smile and a handshake the World frowns and raises there prices to make up for the dollar that is worth less than it was before QE 3, QE 2 and QE1.... bar the door Katie the chit is about to hit the fan big time..

http://www.youtube.com/watch?v=PTUY16CkS-k

[addisonsteele]

05:06 PM on 06/06/2011

And the US government seems to aim at re-creating the conditions that got the US out of the last Depression: a war, this time with Iran.

[dansup]

03:42 PM on 06/06/2011

things will never be the same, we are not at the top of the food chain anymore, and we need to all start accepting the new reality - we had a nice run for about 200 years, it's over now

[Countess]

03:01 PM on 06/06/2011

The faith based economics of the right wing has brought us to our knees and now they are preaching for more of the same which just proves that ignorance dies hard.

[kdlaiusa]

02:56 PM on 06/06/2011

In my area, local newspapers have fewer ads. More local retail businesses have shuttered. There isn't any commerical buildings, no matter big or small, that does not post a "For Lease" sign. Dept stores are slow, diners are not filled up during lunch and diner. Furnitures stores are closing. This will be a brutal and painful summer.

[thestargazer]

11:37 AM on 06/06/2011

Krugman is such the typical "addict" always wanting more and chasing that first high. To an addict, it takes more and more "juice" to reach the same high and It always takes either crashing or hitting rock bottom to realize the mistake in your ways.

[AyeChart]

10:23 AM on 06/06/2011

I think I will post before reading the article.

My bet is that Krugman will blame the poor economy on too little stimulus spending, when the real answer is that there was too much

[68Namvet]

12:29 PM on 06/06/2011

And you have this enormous economic insight because you won 2 Nobel prizes instead of only one - right?

[Christian]

02:13 PM on 06/06/2011

You don't have the education you think you have!

[familydamato]

10:10 AM on 06/06/2011

AMERICAN HOMES AND JOBS!

Main Street Americans can resolve the housing and employment crisis FAST.
How about giving all Americans making less than $250,000yr the option to withdraw retirement savings TAX FREE if they pay CASH for a primary or second home or rent to a foreclosure victim? They must keep the home for at least 3 years or pay the taxes.

Reduce the foreclosure blight, put cash in the economy, increase consumer confidence and provide much needed employment as well as state and local real estate taxes. Taxes paid by the newly hired would probably make up for the tax incentive.

The best part? NO NEW DEBT!!!
Let's put Americans back to work

[marijam]

07:33 AM on 06/06/2011

Our problems are systemic and nothing will change until we address our trade inbalance.

[sachfoxo]

09:17 AM on 06/06/2011

I agree with that marijam. that is one of the major problems !

[rabiddog6708]

11:34 PM on 06/05/2011

You can bet the will make same mistakes. We never learn.

[Peanut Santiago]

02:05 AM on 06/06/2011

The Great Depression.

The Wall Street crash of 1929....due to lack of regulations and crazy high stakes risk taking.
And plenty of banks went under.

Sound familiar?

The government got the bright idea to REGULATE Wall Street and banks.
And it worked.

There were no big problems......UNTIL the 1980's with increasing deregulation.

The savings and loan debacle...which was a WARNING.

Deregulation led to the economic meltdown of 2008 and the Great Recession.....

***Those who don't learn the lessons of history are condemned to repeat them.

[JoeDGoy]

02:08 PM on 06/05/2011

George W Obama!!!!

[jimmygeewhiz]

05:36 PM on 06/05/2011

Your stab at humor has failed, but you've been told that on numerous occasions haven't you?

[democrats for life]

11:01 AM on 06/05/2011

maybe the baggers should get out their history books and see what happens when you cut spending in the middle of a recession. the gop is trying to ruin the country on purpose, can they be that stu pid?

[68Namvet]

11:53 AM on 06/05/2011

Um - in a word - yes.

But, look at the results - the GOP, used the identical statements and arguments from 1994 in their recent 2010 campaigns. They whined about deficits, debt, smaller government, cutting taxes and needing less regulations that stifle the market. When they won in 1994, and took the White House in 2000 - the cut taxes for the wealthy, ran up huge deficits, increased the debt by over $5.6 trillion, added nearly 1,000,000 jobs to the Federal government roles, deregulated everything from EPA and clean water to mine safety and banking, and presided over the largest recession since the great depression.

And, with that track record, the voters rewarded them with control of the house.

So, I guess the question is actually, are the voters really that stupid?

And, again, in a word, yes!

[Peanut Santiago]

01:47 AM on 06/06/2011

Yea, they are that stu pid.

I KNOW they want to keep Obama from winning another term.

HOWEVER, they definitely ARE stu pid enough to think all this laissez faire and Ayn Randism capitalism is good for the country.