[quote=The-Shoveler]When I look at this from someone who never took economics,
California is kind of like the worst of Greece and the worst of Spain and some of Japan put together.
Texas is like Germany (sort of).
With huge public debt (cities dropping left and right, state not much better). And 1/3 of all mortgage owners about 100K underwater on average (and yes most will not be walking away so forget it).
California desperately needs to monetize their Public and private debt, has a growing older population transitioning to fixed income and does not want inflation (Texas probably does not want to either)
what to do!! what to do!! .
I figure one day Ben will just lose it, sand up and say.
“Look we need to inflate out way out of this mess, were going to just print money until were blue in the face, get over it”
And from a over simplified point of view I am sure, “the Euro needs to die”, maybe just keep a free trade zone.[/quote]
I don’t think not taking Econ101 is a detriment here, actually. Put five economists in a room and you’ll get five different opinions. On top of that, economists rely on models to derive their analyses. Depending on the sophistication of the model, the inputs used (or left out) and the experience of the modeler, it is possible to get a wide variety of outputs.
While economists like Krugman attempt to establish primacy through their awards (in Krugman’s case, in a field completely different than this one) or their standing in the field, that fact remains: Economics is more art than science and does NOT rely strictly on empirical data. So, for someone like Krugman, or Samuelson, or Rogoff, to assert that their position is completely correct is laughable in the extreme. It is NOT, because it CANNOT be. There are too many missing variables and subjectivity, not objectivity, is the order of the day.
The Euro is fucked. Period. And “Helicopter Ben” has been printing greenbacks as furiously as possible, what with QE1, QE2, Operation Twist, etc. There are NO answers left, so the default is MORE currency and MORE debt. To say that this is a Keynesian solution is to ignore classical Keynesianism and simply fall back on incessant and repeated pump priming. And that’s where Einstein’s definition of insanity comes into play.
