Originally posted by: sandorski
Originally posted by: winnar111
This is what Paul Krugman said last time the US was in a recession:
http://www.nytimes.com/2001/02...gs-debt-and-taxes.html
The responsible thing, for both the couple and the federal government, is not to give up on planning for the future; it is to make alternative investments. And if this means that the Social Security and Medicare trust funds must buy stocks and bonds from the private sector, so be it.
http://www.nytimes.com/2002/01...ion/the-quiet-man.html
Last month, for example, Karl Rove explained that the tax cut, although originally proposed amid an economic boom, was designed to cope with the current recession. ''All the signs were there in the second, if not the second, the third quarter of 2000,'' Mr. Rove said. When a questioner gently pointed out that Mr. Bush had laid out his tax plan way back in 1999, Mr. Rove brushed him aside.
http://www.nytimes.com/2002/07...-banana-republics.html
The latest antics of the White House Office of Management and Budget have even the most hardened cynics shaking their heads. It's not just that projections for fiscal 2002 have gone from a $150 billion surplus to a $165 billion deficit in the space of a few months; it's not just that the O.M.B. projects a much smaller deficit next year, when everyone else -- including the Republican staff of the Senate Budget Committee -- says the deficit will increase. It's also the fact that O.M.B officials simply lie about what their own report says.
Oh, and this gem, about the deficit, in 2003:
http://www.nytimes.com/2003/01...ion/off-the-wagon.html
There's a reason Mr. Hubbard said what he did in his textbook. When the government sells bonds it competes with private borrowers. By the usual rules of economics, this competition should, other things equal, drive interest rates higher and investment lower.
It's O.K. to run a deficit during a recession, as long as the deficit is clearly temporary.
Correct
I guess he forgot his own advice.