BUSINESS
04/30/2012 06:05 pm ET Updated Apr 30, 2012

Paul Krugman To Ron Paul: 'You're Living In A World That Was 150 Years Ago' (VIDEO)

Econ nerds, eat your hearts out.

Paul Krugman and Ron Paul just got into it on Bloomberg TV over whose monetary policy views are more dated. Paul struck first, calling the idea that the Federal Reserve could effectively determine what the proper interest rate should be "presumptuous." Then Krugman essentially accused him of living in a fantasy universe.

"You can't leave the government out of monetary policy," Krugman said during the not-quite-epic debate billed as "Paul vs. Paul." "If you think that you can avoid that you're living in the world that was 150 years ago."

Not to be outdone, Paul had some choice words of his own about what era Krugman is living in: "He wants to go back 1,000 years or 2,000 years, just as the Romans and the Greeks or others debased their currency," Paul said.

Krugman zinged back: "I am not a defender of the economic policies of Diocletian," referring to the Roman emperor.

U.S. policy makers established the nation's first central bank in the late 1700s, but the Federal Reserve system as we know it didn’t stick until about 1912, according to the Fed’s website. Paul advocates returning to the gold standard or a monetary system where currency is pegged to the value of gold, therefore severely limiting the role of the Fed.

The somewhat heated exchange wasn't all that surprising considering Krugman and Paul have almost completely opposite views. Krugman, a left-leaning economist and Nobel laureate, has been known to defend government intervention in the economy and expansive monetary policy in an aim to boost growth. For his part, Paul, a Texas congressman and Republican candidate for president, is probably the best known advocate for sharply curtailing the role of the Federal Reserve -- his book, after all, is called "End The Fed."

The Bloomberg debate wasn’t the first time the two come to ideological blows. Here’s just one example: a post by Krugman about Paul called "Speaking of people whose models have failed."

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