I think that you cast too wide of a net. The Federal government and central bank need to focus on getting us over the financial crisis. Once we get out, do what is necessary; but that’s for later.
Just because easy money led the Financial Crisis of 2008 does not mean that we should not be “pump priming” out of the Great Recession.[/quote]
Brian: As I’ve written before, we’re in terra incognita now. Like I said, I’m not trying to debunk Keynes, nor am I endorsing Friedman. What I am arguing, however, is that we continue to follow policies that are simply not working. Supposed experts like Krugman can argue, and often persuasively, for more stimulus, but the fact remains that the stimulus Krugman is arguing for simply cannot be implemented. Why? Well, he’s trying to pump money into a system completely unready and unable to receive it. His solutions, like virtually every economists’, are academic and based on models and don’t fare so well in the real world.
This is all about debt. The solution to too much debt does not appear to be more debt. Again, this is a Balance Sheet recession and it spans the globe. The US, the Eurozone and China are all facing significant headwinds and any serious improvement will only happen after that debt overhang is dealt with.
How many times has the Eurozone crisis been fixed? How many times have we heard about a “recovery summer” or a “pivot to jobs”? Is China going to have a hard landing or a soft landing? You know as well as I that if you ask five different economists a question, you’ll get five different answers. We are in a place we’ve never been before and economists, politicians, etc are all throwing shit at the wall in the hope that something sticks.
