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On Debt Ceilings, Fiscal Cliffs, And Krugman's Deficit Debacle

Tyler Durden's picture


With all the buzz about the 'Fiscal Cliff' – that toxic combination of tax increases and spending cuts due to take hold in a few months – the subject of ongoing Federal budget deficits has fallen by the wayside.  ConvergEx's Nic Colas believes that’s a temporary phenomenon, for Congress will have to hammer out agreements to raise the debt ceiling right alongside its negotiations over the 'Cliff' items.  His back-of-the-envelope attempt to quantify how much a multi-year debt limit increase would run to take this burdensome legislative issue off the Congressional docket for 5, 10 or even 20 years is worrisome at best.  Using the most recent Office of Management and Budget’s numbers, we get to $3.4 trillion for the 5-year runway, but this assumes a high level of incremental taxation.  Against more modest expectations for government revenues (consistent with adjustments to forestall the 'Cliff'), the number could be as high as $4.5 trillion.  As for the longer time horizon debt runways, think in terms of an incremental $6.5-9.5 billion for a 10 and 20 year horizon. And without significant changes to taxes and/or spending, more.  Much more.

Nic Colas, ConvergEx: Jimmy Cliff, Paul Krugman, and the Federal Deficit - The Harder They Come...

This summer will mark the 40th anniversary of one of the great pop music movies of all time – the 1972 film The Harder They Come, starring Jamaican reggae artist Jimmy Cliff.  The movie came with a full-length album for a soundtrack, replete with songs that have become reggae classics in the intervening four decades.  It made Cliff an international star and ambassador of the genre, with songs like “Sitting in Limbo,” “You Can Get It if You Really Want It,” and the title track.  The album is regularly mentioned in music industry magazines “Top Albums of All Time” lists.   The success of The Harder They Come paved the way for other, now perhaps better known, acts like Bob Marley and Peter Tosh.

The year 1972 has another, less happy distinction, known only to students of U.S. economic history: it is a reasonable starting point for the modern trend of American government spending much more than it receives in receipts every single year.  The Vietnam War had been tough on the Federal Budget, as had other spending programs, and 1971 and 1972 saw back-to-back deficits of $23 billion apiece. That is about $126 billion today, adjusted for inflation.  Prior to this period, the only greater annual deficits had been in 1968 ($25 billion) and during World War II (an average of $43 billion annually from 1942-1945, or $570 billion today).

All the historical data is easy enough to find (click here and go to Table 1.1  Here are a few further observations:

  • In the last 40 years, the U.S. Government has run a surplus just four times, from 1998 to 2001.  We quote government fiscal years here, by the way, which end in September.  This includes ‘On Budget’ items (Defense, Health Care, etc) and ‘Off Budget’ (Social Security, mostly).
  • The aggregate amount owed from these deficits is essentially the Federal Debt of the U.S., which currently stands at $15.7 trillion.
  • The average deficit over the last four years (which includes the 2012FY) is $1.3 trillion per year.  For the 20 years prior to this, the average deficit was $162 billion/year. That includes the effect of the 4 years of surplus.
  • While it may seem like ancient history, consider that during the period from 1945 to 1972 the U.S. ran a collective deficit of $123 billion, or just $677 billion in today’s dollars.  Of the 27 years in this run, there were Federal budget surpluses in 8 of them.

Fast forward to the present day, and these deficits have morphed from history lesson to political football.  The reason for this is the Federal Debt Ceiling, as we all learned in gory detail during last year’s Congressional debate on the topic.  The limit on Federal debt currently stands at $16.4 trillion.  We’ve included a handy table for the historically inclined reader on every past increase to the limit since 1940.  There are 79 increases on the list, ranging anywhere from less than 1% (1987 was the last time) to +25% (1990 for that case).  At the current pace of spending and receipts, the U.S. government will be out of debt capacity this calendar year, even if Treasury can massage outcome to push another debate into 2013.

Since the last debate was so fractious, I wondered what it would take to get an increase to Debt Limit that might last the country for 5, 10 or even 20 years.  Based on the OMB Budget (see that prior link for the exact numbers) as currently presented by the White House, here are some baseline numbers:

  • For 5 years: $3.4 trillion.  This is the simple total of the coming five years of expected deficits from the White House budget.  For reference, consider that over the last five years the debt ceiling has gone from $9.8 trillion to its current $16.4 trillion, an increase of $6.6 trillion.
  • For 10 years $6.5 trillion. The end point (2017FY) of the OMB budget shows an annual deficit of $612 billion.  Assuming that this is a constant figure and Congress is fine with a (relatively) small deficit like this, we multiplied it by 5 and added it to the $3.4 trillion explicitly modeled for the first five years.
  • For 20 years: $12.6 trillion.  Same assumptions here.  Ten more years at $612 billion, added to the first ten years.
  • A lot of money, yes, but remember that we’re talking future dollars here.  A dollar in the 2022, ten years hence, is presumably worth less than a dollar today if inflation is greater than zero.

Here’s the rub, however: the expectations in the OMB Budget as presented on its website are highly optimistic on tax and withholding receipts because they assume that the “Fiscal Cliff” of higher tax rates and lower spending kick in with full  force in 2013.  Just one number to make the point here: OMB’s deficit numbers assume that tax/withholding receipts increase from $2.5 trillion this year to $3.9 trillion in 2017.  Compounded growth rate: 9.3%, meaning no recession in the next five years and a pretty much straight shot higher for employment.

So what are the “Real numbers?”

The Congressional Budget Office just took a stab at those calculations in a recent report (  Their “Alternative Fiscal Scenario” – essentially a realistic “Keep things as they are” projection – shows debt increasing by approximately double the current base, adjusted for inflation. That would put the 20 year debt limit amount at closer to $24 billion, assuming 2 percent inflation.

This is where the “Fiscal Cliff” debate that Congress must have before the end of 2012 dovetails with the debt ceiling debate, and I would argue that forcing lawmakers to vote on a 10-20 year horizon would actually help the process along.  The CBO and OMB have some decent models for what the world looks like under the current order of things, as well as under some pretty drastic changes.  If you just consider a one-off increase to the debt ceiling and some kick-the-can solutions to the Fiscal Cliff, you’ll never really address the whole picture.  That’s where Congress is heading, but it doesn’t have to be.

I also cannot help but think about Paul Krugman as I stare at these numbers.  His recent book, End this Depression Now, proposes that “A quick, strong recovery is just one step away, if our leaders can find the intellectual clarity and political will to end this depression now.”  This “One step” is deficit spending that is orders of magnitude greater than anything spent already.  Honestly, I have no idea if he really believes any of this, since it is politically impossible.  He’s a smart man, and he clearly knows this.  And he’s got a Nobel, yes, but so did the guys at Long Term Capital.  Still, I bet this modest proposal would meet with his approval, and maybe even Paul Ryan (R- WI), the fiscally conservative Congressman. Let’s have the whole debate, using the real long term numbers, and let the chips fall where they may.

And, lastly, the whole conversation of how the U.S, will square the circle of the debt ceiling/Fiscal Cliff debate brings me back to Jimmy Cliff and the track “Too Many Rivers to Cross” from The Harder They Come:

Many rivers to cross

But I can’t seem to find my way over.


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Tue, 06/12/2012 - 23:31 | 2520327 veyron
veyron's picture

Krugman has such a punchable face ...

Tue, 06/12/2012 - 23:40 | 2520341 TruthInSunshine
TruthInSunshine's picture

If Keynes were alive today, he'd sue Krugman for libel & slander, and he'd file a petition for an injuntion, restraining Krugman from engaging in any future butchering and torturing of what Keynes believed and endorsed.


By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”


--John Maynard Keynes

from The Economic Consequences of the Peace (p. 235-6)

Tue, 06/12/2012 - 23:45 | 2520357 Dr. Engali
Dr. Engali's picture

Damn! That secret wasn't supposed to get out.!

Wed, 06/13/2012 - 00:18 | 2520422 AlaricBalth
AlaricBalth's picture

Dr. Krugman. Is it your learned opinion that an invasion of xenomorphic endoparasitoids from Omega Centauri is the most optimal mode of deliverance from our current economic quagmire?

Wed, 06/13/2012 - 00:58 | 2520474 NewThor
NewThor's picture

Listening to Nobel Prize winning Dr. Paul Krugman talk about economics is almost the exact same thing as listening to Harold Camping talk about the Rapture.


Wed, 06/13/2012 - 01:13 | 2520505 Ropingdown
Ropingdown's picture

Humor me:  It's the Riksbank Prize.  Alfred Nobel had nothing to do with it.  Let's stop encouraging economists pretending they are physicists. 

Wed, 06/13/2012 - 01:29 | 2520533 Pinto Currency
Pinto Currency's picture


It's a world-wide debt bubble collapse not a fiscal cliff.

Thank you central bankers.

Wed, 06/13/2012 - 04:17 | 2520656 Dr Benway
Dr Benway's picture

This is the best Krugman picture though.


Drink yourselves sober, bitchez!

Wed, 06/13/2012 - 06:25 | 2520730 Poor Grogman
Poor Grogman's picture

Writing economic treatises while smashed is obviously the problem here folks...

Wed, 06/13/2012 - 07:46 | 2520832 johnQpublic
johnQpublic's picture

author states 24 billion where it should be trillion for the long term defecits. thats 24 trillion on top of 17 trillion for 41 trillion....and even thats low because the numbers he is using add up to 26 trillion plus the projected 17 trillion at the end of this year.

so 20 years from now....43 trillion dollar national debt


and krugman wants to spend even more than that?


and just how much would we need to raise taxes to pay that off?

and over how many years?

tax rates would need to double just to stay even, much less pay the debt off

tax rates would need to triple to actually pay the debt off over a reasonable 30 year mortgage like time frame

so middle class tax rates at 105% of income

not to mention state tax,property tax,sales tax and all the 'stealth' taxes

figure what, about a total 125% tax rate for the middle class?

150% for rich folks


maybe a remedial math class should be provided as part of the nobel process?

Wed, 06/13/2012 - 17:45 | 2523580 mkkby
mkkby's picture

Exactly Ropingdown.  A Nobel in a hard science is a major accomplishment.  A Nobel in economics might as well be in astrology or palm reading.  Like making lawn darts an olympic sport.

Wed, 06/13/2012 - 01:16 | 2520511 The Monkey
The Monkey's picture

Krugman is a relic. The only benefit he provides at this point is comic relief.

Wed, 06/13/2012 - 02:23 | 2520606 Element
Element's picture

Close, but it's more like:

"Debt and war killing your economy?

More debt and more war will fix that!"

- Paul Special-K

Wed, 06/13/2012 - 02:50 | 2520620 barliman
barliman's picture


Wow!   What did Harold Camping (being a tele-evangelist means never having to say you're sorry) ever do to you to justify you comparing him to a sociopath like Krugman?



Wed, 06/13/2012 - 05:25 | 2520686 Zero Govt
Zero Govt's picture

Krugman is Ben Bernankes poster-child

every bubble blower needs a hero

Wed, 06/13/2012 - 07:42 | 2520825 StormShadow
StormShadow's picture

Is it just me, or does Krugman remind you of that one ScoutMaster in Boy Scouts that nobody quite fully trusted. You know sorta a likable guy not too smart that everyone felt sorry for but also caused you to keep your flashlight and Buck knife at the ready in the night lest he decide to give you a visit from the Ether Bunny.

Seriously this man has totally lost it and truly needs professional medical help.

Wed, 06/13/2012 - 00:23 | 2520433 lolmao500
lolmao500's picture

Gee Keynes actually saying something that makes sense... has hell frozen over?

Wed, 06/13/2012 - 01:10 | 2520498 Ropingdown
Ropingdown's picture

Keynes said many fine and true things.  But those weren't the parts that economists want to emphasize once they're on the payroll, some payroll.

Wed, 06/13/2012 - 07:30 | 2520811 ATM
ATM's picture

Keynes was a Socialist so perhaps the quote cited above was not so much a commentary but advice.

Wed, 06/13/2012 - 00:51 | 2520467 Stimulati
Stimulati's picture

Except that Keynesian theory and Krugman both predicted that the current environment wouldn't generate inflation, and it hasn't

Wed, 06/13/2012 - 01:00 | 2520475 TruthInSunshine
TruthInSunshine's picture

Inflation Over The Last 12 Months (as of March 2, 2012)

Cotton is up 132 percent.

Agricultural raw materials up 39 percent.

Oil up 21 percent.

Coal up 36 percent.

Coffee up 70 percent.

Wheat up 62 percent.

Beef up 39 percent.

Fish up 31 percent.

Hard logs up 19 percent.

Soft logs up 27 percent.

Rubber up 79 percent.

Wool up 57 percent.

Fertilizer up 39 percent.

Soy beans up 42 percent.

Corn up 58 percent.

Industrial Inputs Price Index up 51 percent.

Commodity Food Price Index up 30 percent.

Commodity Fuel Price Index up 20 percent.

Wed, 06/13/2012 - 01:04 | 2520479 Stimulati
Stimulati's picture

The billion price index is up 2% YoY and trending down while retail gas is currently 14 cents below last year

Wed, 06/13/2012 - 01:08 | 2520490 TruthInSunshine
TruthInSunshine's picture

So, it's "only" up 2% YoY, and now trending down (allegedly, and for how long is anyone's guess), but most major commodity prices are up by a factor of 20% to 1000% depending on the asset, over the past 4 years, and your claim that Krugman's prediction that inflation (let alone massive inflation) hasn't taken place isn't laughable?

You're the kind of person who apparently would tell someone that there's deflation in fuel prices, since unleaded gasoline is about $3.80/gallon now, as it has come down from just over $4 6 months ago, right?

Wed, 06/13/2012 - 01:19 | 2520519 Stimulati
Stimulati's picture

First, you shouldn't confuse commodity prices with consumer prices.  Second, gas is about $3.57 now.  Still too high, but lower than you say.  Third, global warming causing a low supply of wheat doesn't have much to do with monetary / fiscal policy does it?

Wed, 06/13/2012 - 01:36 | 2520541 TruthInSunshine
TruthInSunshine's picture

Ahhhhhh, it's global warming's fault. Aha!

How about an absolute torrent of fiat that has been conjured from nothing and distributed to TBTF and quasi-TBTF entities which have been buying all tangible assets hand over fist (prompting non-TBTF entities to follow suit).

Wed, 06/13/2012 - 01:38 | 2520546 Stimulati
Stimulati's picture

That's just explaining the commodity price of wheat.   There is no fault here because inflation is well managed at 2%.

Wed, 06/13/2012 - 01:46 | 2520551 TruthInSunshine
TruthInSunshine's picture

Where are you citing your "well managed inflation" rate of 2% spiel from?

March 2, 2012

What's the real rate of inflation?

Rick Moran

It won't surprise you that it is not the "official" rate of 3.1%.

CBS News:

Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.

The institute contends that to get a good read on inflation's "sticker shock" effect, you must look at the cost of goods that the average household buys at least once a month and factor in only the kinds of expenses that are subject to change. That, too, eliminates the cost of housing because when you finance your home with a fixed-rate mortgage, that expense remains constant until you refinance or move.

The group maintains that this index better measures the real-world impact of price changes, particularly for people on a budget. And, largely as the result of the recent run-up in gas prices, this "everyday price index" (EPI) suggests that Americans are being pinched far more tightly than the official inflation measure would have you believe.

Over the past year, the EPI is up just over 8 percent, according to the economics group. The biggest factor: Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government's inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively.

The CPI "market basket" is rigged to show a lower rate of inflation. It has been this way for more than 20 years. With so many pensions, union raises, not to mention Social Security tied to the CPI, there is a significant lobby out there to keep the "official" rate of inflation as low as possible.

Is the rate coming out of Washington a total scam? Not really when one considers that the market basket gives less weight to items like food and fuel which tend to fluctuate wildly from month to month. For statistical purposes, that is probably ok.

But anyone who goes to the grocery store on a regular basis knows they're spending a lot more to feed their families and fill their car with gas than they were last year.

Wed, 06/13/2012 - 01:48 | 2520568 Stimulati
Stimulati's picture

I use the billion price index because people think the CPI is rigged

And one more thing - gas prices are lower than they were at this time last year.

Wed, 06/13/2012 - 08:00 | 2520862 Gazooks
Gazooks's picture


So what? To cite short term price volatility is meaningless, unless of course you're trading it. But macro trend consequences are quite something else as Garthwaite explains below. (And, where do you suppose gas will land when the Iranian wild card is played?) There's the set up 'now' for the shock of the 'then' amidst the interminable grind of the long term trend. That's the frequency that matters as a measure of inflation and its implications, the rest is merely tradable noise.

8 year chart of oil and gasoline prices: ch.gaschart

From Credit Suisse's Andrew Garthwaite:

The impact on GDP: each 10% rise in the oil price takes 0.2% off US GDP growth and 0.1% off global growth.This time the negative impact of a high oil price on growth is limited as: oil is only 10% above its 6-month MA (changes matter more than levels for growth); other energy prices are muted (coal prices are at 12-month lows, US gas prices down 40% yoy) and CPI food price inflation should fall by 5pp from here (adding 0.7% to disposable income); critically, unlike 2008 and 2011, neither the ECB nor GEM central banks are likely to raise rates in response to higher energy costs; and US macro momentum is currently consistent with GDP 0.8% above 2012 consensus, suggesting some buffer before consensus estimates get downgraded.


Wed, 06/13/2012 - 08:01 | 2520863 BigJim
BigJim's picture

Even according to them ( annual inflation is running at 3.74%, not 2%

Furthermore, are they weighting for household consumption, or including things like cars, rooms at the Ritz, yachts, airfares, mediteranean cruises? If we give yacht prices and Greek hotel rooms the same weighting as groceries, then, yes, I can well believe inflation is 'only' 3.74%.

John Williams' shadowstats is far more indicative of real inflation, particularly when comparing rates historically. It's all very well to say the billion prices project is only showing 2%, but what would it have shown prior to all the QE? We don't know, because it wasn't running back then; but for all we know it may have been showing an inflation rate of -8%, mightn't it?

Wed, 06/13/2012 - 05:08 | 2520680 Element
Element's picture

I pine for the days when it was only $10.4 trillion ... what a time ... before Hank had to go into hiding.


On this day in 2016 - various US budget proposals extrapolated:

Wed, 06/13/2012 - 06:39 | 2520750 Freewheelin Franklin
Freewheelin Franklin's picture

The only thing that seems to be keeping the inflation rate down, is the very low price of natgas, thanks to hydraulic fracturing. But after your comment about global warming, I'm sure you would like to put an end to that, or at least, put so many regulations on it, that compliance will cause drilling costs to increase, making it more difficult to maintain a profit at lower prices.

Wed, 06/13/2012 - 06:31 | 2520732 Freewheelin Franklin
Freewheelin Franklin's picture

Third, global warming causing a low supply of wheat


"The 'weather' is the last resort of a scoudrel"


- Nouriel Roubini

Wed, 06/13/2012 - 01:09 | 2520493 Ropingdown
Ropingdown's picture

If only I was in the market for a billion things....

Wed, 06/13/2012 - 03:02 | 2520627 barliman
barliman's picture


Pssst, don't tell him even the MIT authors have stated their index is not an appropriate means for judging inflation because it is too easily gamed.

He thinks he is on a roll.


Wed, 06/13/2012 - 01:14 | 2520507 Saro
Saro's picture

"Food* is up but yacht prices have been hit hard by the downturn, so in aggregate everything is equal!"


*Consuming under-cooked iPads puts you at risk for a food-borne virus.

Wed, 06/13/2012 - 08:32 | 2520941 Ayn NY
Ayn NY's picture

They're trying to hide the double digit inflation in the housing crash. I like my iPad rare, btw.

Wed, 06/13/2012 - 06:22 | 2520727 Freewheelin Franklin
Freewheelin Franklin's picture

Melissa Francis was talking about this last night witha small business owner, and how his costs have increased over the past 4 years. The result is smaller margins, and fewer customers (obviously).


God, I love Melissa.

Wed, 06/13/2012 - 01:27 | 2520529 JuicedGamma
JuicedGamma's picture

True, wages aren't inflating, it's a temporary side effect of the Chinese peasants being released onto the world manufacturing scene. Soon this will run it's course and the damage will become apparent in an unprecedented worldwide hyperinflationary death spiral conflageration.

Wed, 06/13/2012 - 01:40 | 2520552 Stimulati
Stimulati's picture

Yes, Smithers, yes.  Hyperinflation is just around the corner.  Has been for 3 years now.  Yes, yes.

Wed, 06/13/2012 - 01:54 | 2520577 TruthInSunshine
TruthInSunshine's picture

Straw man, much?


You buy the official 2% tagline bullshit, while the real rate is close to 8%, and then you dare to tag someone, without cause, as claiming hyperinflation.

I have a little mathematical fact for you, which you're apparently ignorant enough not to understand; forget the 8% (even though it's closer to accurate than not), and let's split the difference between your 2% and my claim of 8%.

At an 5% average annual rate of inflation, one would need 50% more dollars to buy the same basket of goods in a decade than they do now.

Do you claim that wages are rising on the order of 5% per year at present (massive unemployment, underemployment levels, notwithstanding)?

If you concede inflation is 8%, do you claim that the average American's wages will rise to the level allowing them to maintain purchasing power over a decade's time (you can use median or average wage gains, at your sole discretion)?

Wed, 06/13/2012 - 01:57 | 2520579 Stimulati
Stimulati's picture

At the company where I work (mid sized US company that you've heard of) our prices are down 2% this year after a 3% decrease last year.  Yes, I think 2% is about right.

Wed, 06/13/2012 - 02:02 | 2520585 TruthInSunshine
TruthInSunshine's picture

So now you're resorting to anectodal examples based on prices at the "company where you work."


Wed, 06/13/2012 - 02:07 | 2520590 Stimulati
Stimulati's picture

Better than you making up numbers out of your arse

Wed, 06/13/2012 - 02:11 | 2520597 TruthInSunshine
TruthInSunshine's picture

I've given specific cites, providing actual percentages.

You can argue with those percentages, if you wish, but you haven't even bothered to do the same, and accuse me of "pulling numbers out of [my] arse?"

You're a SockPuppet. C'mon. I have always had this vision that one day a SockPuppet would come out and admit it, and that they might even provide evidence of their other 19 alter IDs...

Wed, 06/13/2012 - 02:16 | 2520602 Stimulati
Stimulati's picture

I've cited 2% and its closer to my reality when I work and shop.  I don't know anything about who funds the organization you cited but I do understand the method behind MIT's billion price index.  I also trust the CPI, which as you say is closer to 3% (and trending down).

Wed, 06/13/2012 - 02:27 | 2520607 TruthInSunshine
TruthInSunshine's picture

. "I also trust the CPI"


I think you're a hopeless case. I am not intending to insult you, but rather, making an admittedly blunt observation.


"Closer to 2% where I work and shop."

And even if this were mathematically true (with you logging your purchases and dates, etc.), you're can't seem to acknowledge the uselessness of the whole anecdote 'thing.'


Then again, you could just be major league trolling.

Wed, 06/13/2012 - 03:08 | 2520630 barliman
barliman's picture


Simpler explanation ...

... he can't do the math and doesn't know the approriate terms to Google an online calculator.

Might I suggest ignoring the troll since there is no virtual sledge hammer to be found to put him out of our misery?


Wed, 06/13/2012 - 05:06 | 2520679 francis_sawyer
francis_sawyer's picture

The 'prices' his company charges may be 2% less, but he omits that the package volumes are 10% less...

Wed, 06/13/2012 - 02:59 | 2520624 barliman
barliman's picture


Just so you know ...

...even the English gave up saying 'arse' because it was too pretentious for THEM.


Wed, 06/13/2012 - 03:58 | 2520651 AnAnonymous
AnAnonymous's picture

Except that Keynesian theory and Krugman both predicted that the current environment wouldn't generate inflation, and it hasn't

Inflation can have several causes, all operating at the same time.

US citizens love to go one against other, in a shallow attempt to masquerade for the diversity they are supposed to favour but in reality loathe on, on monetary policy.

How inflation should be defined. Or issuance of money is or not inflation, affects inflation.

The truth is as US citizens are failing to overcoming the environment, as US citizens aim at depleting resources, inflation is down the path, no matter their monetary policy.

Wed, 06/13/2012 - 14:23 | 2522617 ffart
ffart's picture

Hey ORI, what happened to your blog links?

Wed, 06/13/2012 - 04:21 | 2520658 GernB
GernB's picture

Says who? CPI? CPI is a rigged statistic in many ways. Krugman himself published a paper on the topic of how CPI underestimates inflation.

Wed, 06/13/2012 - 20:47 | 2524028 JeffB
JeffB's picture

How prescient.

Our "current environment" is an inherently deflationary one due to the bursting debt bubbles caused by their Keynesian excess. Their remedy is to try and counterbalance the catastrophe they've caused by inflationary/hyperinflationary countermeasures.

What could go wrong?


Wed, 06/13/2012 - 07:39 | 2520820 kralizec
kralizec's picture

What we have now are Neo-Keynesian Machiavellians.  The profiteering through destruction is not wealth creation.

Wed, 06/13/2012 - 01:04 | 2520484 John_Coltrane
John_Coltrane's picture

I'd rather take a shit on it.  Then he'd finally have a shit eating grin!

Wed, 06/13/2012 - 01:40 | 2520554 Vic Vinegar
Vic Vinegar's picture

2 years and 10 weeks for you J_C and it culminates in this.

Strange days, huh?

Wed, 06/13/2012 - 01:09 | 2520494 CrashisOptimistic
CrashisOptimistic's picture

Wait a minute.

The deficit is 1.3 Trillion.

The 5 year projection for what this adds to is claimed as


"Using the most recent Office of Management and Budget’s numbers, we get to $3.4 trillion for the 5-year runway, but this assumes a high level of incremental taxation.  Against more modest expectations for government revenues (consistent with adjustments to forestall the 'Cliff'), the number could be as high as $4.5 trillion."

Since when did 1.3T X 5 only equal 4.5T?  1.3 T X 5 = 6.5 Trillion.

WTF is this daring to presume things are going to get better? 


Wed, 06/13/2012 - 05:43 | 2520697 Beam Me Up Scotty
Beam Me Up Scotty's picture

I was thinking the exact same thing. You can pretend deficits will go down below a trillion per year but it isn't going to happen. As if the gubbamint is going to cut spending? Ya right. And you can't begin to raise taxes enough to get the defect below a trillion per year either. You can not only tax the rich at 100% but confiscate 100% of their wealth and it would only fund the gubbamint for a year.

Then what?

Wait until Obamacare fully kicks into hyperdrive too. People that actually think that is going to be deficit friendly are fucked in the head!!

Wed, 06/13/2012 - 20:56 | 2524046 JeffB
JeffB's picture

Taxing the rich 100% wouldn't fund the government for nearly a year.

Check out Tony Robbins' discussion on trying to eliminate the deficit via taxation:

The National Debt and Federal Budget Deficit Deconstructed - Tony Robbins
Wed, 06/13/2012 - 01:21 | 2520520 Peter Pan
Peter Pan's picture

It's not his fault. That blasted Nobel Prize Committee started it by giving him a prize. When someone advicates spraying cash all over the place, you know it's time to take cover. Then again, it would not be outside the realm of reality to see this happen.

Wed, 06/13/2012 - 08:41 | 2520968 Ayn NY
Ayn NY's picture

The Nobel prize is for hard science. The prize for economics piggybacks on the Nobel name but Nobel himself had nothing to do with it.

Wed, 06/13/2012 - 01:52 | 2520573 Vic Vinegar
Vic Vinegar's picture

17 greens to zero until I gave you the first red, veyron.  

No offense to you, and TruthInSunshine deserves greens everytime he is here.

But why punch the guy?  Kruggers doesn't deserve that.  He sees the world through his lens and is doing the best he can with it.  And surely he has more influence than you or I...

Wed, 06/13/2012 - 03:12 | 2520632 barliman
barliman's picture


mmmmm, nope ...

I'd say anyone has more influence than Krugman because they function in the real world and might step on a butterfly thereby causing a typhoon to hit Kuala Lampur.

Krugman's butterflies are all inside his fuzzy wee mind.


Wed, 06/13/2012 - 22:16 | 2524262 JeffB
JeffB's picture

I'll agree that he has influence, but don't give him any credit for that, because the influence he exerts is destructive to our economy and therefore to society.

Given the influence he has, he has a responsibility to learn and understand the economics he pushes onto those making the economic decisions. Like a doctor he should first "do no harm".

Unfortunately, his ideas do much harm .


Tue, 06/12/2012 - 23:31 | 2520328 SilverTree
SilverTree's picture

I really don't like that Krugman guy.

Wed, 06/13/2012 - 00:03 | 2520400 HD
HD's picture

Here's a secret - Krugman is really just Bob Pissani walking on his knees wearing a fake beard. Note how they are never in the same room together.

Wed, 06/13/2012 - 00:14 | 2520416 A Nanny Moose
A Nanny Moose's picture

...and just what is he doing on is knees...I wonder?

Wed, 06/13/2012 - 00:21 | 2520429 HD
HD's picture

I doubt its praying...

Wed, 06/13/2012 - 01:19 | 2520517 JuicedGamma
JuicedGamma's picture

He is picking up nickels in front of the steamroller debt he is so intent on increasing.

Tue, 06/12/2012 - 23:39 | 2520342 LetThemEatRand
Tue, 06/12/2012 - 23:40 | 2520343 Dr. Engali
Dr. Engali's picture

Just the thought of reading anything Krugman wrote makes me want to puke, then go postal,followed up with some bath salts, and finally some zombified puking. What does he want to spend eleventy trillion? How about a quadrillion? Why stop there? Lets spend a quintillion right now. Where does your argument break down Kaveman?

Tue, 06/12/2012 - 23:48 | 2520369 LetThemEatRand
LetThemEatRand's picture

Hold on tight Dr. Engali.


Tue, 06/12/2012 - 23:42 | 2520349 Stackers
Stackers's picture

The alien invasion starts in September. Hope they have the new Death Star fully armed and operational by then

Wed, 06/13/2012 - 01:01 | 2520478 NewThor
NewThor's picture

If Nibiru the Destroyer is cloaked and fully functional....


i got nothing. so sick of krugman, bernanke, geithner and merkel

Wed, 06/13/2012 - 00:07 | 2520355 Future Jim
Future Jim's picture

Here is why Krugman is the most valuable person in the world:

You see, Krugman is wrong 90% of the time, which is very hard to do - just as hard as being right 90% of the time. In fact, there may not be anyone who is right 90% of the time, but there is one way that we can all be right 90% of time - just do the opposite of whatever Krugman says.

Wed, 06/13/2012 - 00:29 | 2520439 AlaricBalth
AlaricBalth's picture

Krugman and Goldman's Tom Stolper are two of the best contrarian indicators ZH tracks. They must have been separated at birth.

Wed, 06/13/2012 - 08:52 | 2521013 Ayn NY
Ayn NY's picture

I don't know, I don't remember CNBC's Steve Leisman ever being right, so maybe you can be wrong on one subject a 100% of the time.

Tue, 06/12/2012 - 23:45 | 2520358 lasvegaspersona
lasvegaspersona's picture

and we must not forget Johnny Nash in a close tie with Cliff for bringing Reggae to the States...I Can See Clearly Now and the Marley hit Stir It Up (Tears on My Pillow too)

Tue, 06/12/2012 - 23:45 | 2520360 the 300000000th...
the 300000000th percent's picture

I heard a guy talking on NPR (national propaganda radio) the other night about the economy that sounded like a complete idiot, he made me soooo fucking mad i wanted to punch my radio until it stopped making noise and then i realized I was listening to Paul Krugman. It was the first time i heard his voice and i wont ever forget it, i hate that fucking guy. He is just another highly popular cheerleader for the death of America.

Wed, 06/13/2012 - 05:35 | 2520692 Zero Govt
Zero Govt's picture

most University Economic Professors are Marxist toerags

Krugman is no exception 

Tue, 06/12/2012 - 23:46 | 2520361 cherry picker
cherry picker's picture

"Render to Caesar the things that are Caesar's, and to God the things that are God's"....Jesus Christ.

Maybe that is the difference between God and man?  God doesn't need a damn thing, man needs plenty.

Wed, 06/13/2012 - 01:05 | 2520483 Ropingdown
Ropingdown's picture

If God made the world and we evolved from the world's substance, our needs are an accident of evolution.  But hey, I feel the need for a bright-eyed and devoted blond, some good tennis partners, numbers on a slip of bank paper, good food, some land and gold, and a few intelligent friends to give me clues for hunting in the financial god must be beneficient after all.  What I want I have and if I want more I know what work I have to do.  If I had none of it, I'd have some concrete goals.  This doesn't mean I don't think most politicians, central bankers, and Krugman are asses.  It just means I have to network around them.  Damned, my glass is empty.

Tue, 06/12/2012 - 23:49 | 2520370 q99x2
q99x2's picture

How would anyone if the numbers going to the fiscal cliff have any basis in reality? The whole system is fraudulent and meaningless except in the event that it no longer works. At this point we mayswell see how far we can ride that mother.

Wed, 06/13/2012 - 00:15 | 2520375 CompassionateFascist
CompassionateFascist's picture

"the CBO and OMB have some decent models...real numbers". Really? Like they did c. 2001 when predicting a $2 trillion+ fedgov surplus by 2011? Only missed by c. $25 trillion.  The entire Beltway Gang - banksters, politicians, & apparatchiks - needs to be exterminated.  

Wed, 06/13/2012 - 01:44 | 2520562 Vic Vinegar
Vic Vinegar's picture

Another season of Big Brother starts July 12. 

What comes first: the new Big Brother champion is crowned or you start shooting?  Inquiring minds and all.

Wed, 06/13/2012 - 03:54 | 2520646 CompassionateFascist
CompassionateFascist's picture

Victoria, it's Big Bro Begins by a nose. I don't think Ponzi Collapse will occur in U.S. until late July-early August...shortly after Isramerica hits Iran and oil prices go to sustained $200-300/barrel spike. 

Tue, 06/12/2012 - 23:51 | 2520376 DeadFred
DeadFred's picture

Maybe I'm missing something but do they really think the yearly deficit is going to go down?

Tue, 06/12/2012 - 23:54 | 2520383 Dr. Engali
Dr. Engali's picture

That is what off balance sheet spending is for.

Wed, 06/13/2012 - 05:50 | 2520702 Beam Me Up Scotty
Beam Me Up Scotty's picture

In other words they can just pull any number they want out of their ass or completely make shit up. It's all one and the same.

Tue, 06/12/2012 - 23:53 | 2520380 Overfed
Overfed's picture

Kind of O/T, but I'm obsessed with PMs of late, so that's what I talk about.

 I was in a pawn shop today, looking at some way overpriced silver rounds. I made a comment that I was going to have to wait 'til the price came way up to buy those. The lady behind the counter looked me straight in the face and and said "It's never gonna go that high ($35) again."  I stifled a derisive laugh, left that joint, made my way to the barbarous relics emporium and bought half a dozen silver eagles and a big handful of "junk" coins. All the guy had. Is it me, or is physical getting scarce?

Tue, 06/12/2012 - 23:57 | 2520390 Convolved Man
Convolved Man's picture

By 2020, dollars will be wrapped around corn cobs in the poshest outhouses on Wall Street; the rest of us on main street will be squatting in streams letting crawdads, catfish and minnows nibble our butts clean.

Wed, 06/13/2012 - 00:03 | 2520399 lasvegaspersona
lasvegaspersona's picture

Keynes' words hold the answer to future wealth...BE one of those who profit beyond your 'deserts'.

The map is on the table in front of you and it is not your fault it was left open for you to see. Anyone on ZH who does not come out of this richer is not reading what has been written. When Money Dies is a how to book for getting rich in an inflationary environment. It details the legal and illegal methods used to procure vast wealth while the average person suffered greatly.

I do my best to inform those who will listen but they mostly laugh and pat me on the back.

I will feel no shame or remorse in the future. I see a problem and I see a solution and I am following a plan. It all seems pretty obvious to me. I think the fact that is will be horrible scares most people into inaction. Do not be one of those people...listen to Keynes, he was smart and I understand generally did well in the least he understood inflation and debauchment of currency.

Wed, 06/13/2012 - 00:16 | 2520419 lailapa
lailapa's picture

World War III - The first private war in history

Those who won all battles shall lose the war.

The terror in the Greenspan’s eyes, while he was explaining to the American officers the causes of the financial fall is particularly revealing. Experienced “Keitel” knows that this will not be his last apology. He knows that the worst is yet to come.


The end of the world is near ...The ten plagues of Pharaoh “have been brought upon” the USA.

We will try at this point to do something strange and the readers will have to pay close attention in order to understand. We have all been taught at school some very important historical facts which have determined the course of humanity. One of these facts was the plagues of Pharaoh we have been taught in Religious Education. What do the ten plagues of Pharaoh refer to? They refer to the problems that preoccupied the Pharaoh; the problems that preoccupied his empire and its people. Therefore, we are talking about “plagues” which can shake an empire and lead it to death. Isn’t the USA that kind of an empire? Isn’t it the planet’s leader? Isn’t it “sick” at the moment and runs the risk of “dying” as such, leading its people to lament?

The plagues of Pharaoh, that is, could be the “plagues” of the current incumbent. They could be Obama’s problems; a problem that could have a reasonable explanation.

Wed, 06/13/2012 - 00:18 | 2520424 lolmao500
lolmao500's picture

Wasn't WW1 the first private war?

Wed, 06/13/2012 - 03:37 | 2520641 Shylockracy
Shylockracy's picture

The shit you, Olympia and Penisidiotis post is greek to me.

Wed, 06/13/2012 - 00:18 | 2520420 slewie the pi-rat
slewie the pi-rat's picture

microwaves, baby

Wed, 06/13/2012 - 00:18 | 2520421 lolmao500
lolmao500's picture

The US won't make 2 years at current rates, so keep dreaming with your 5-10-20 years projection.

Wed, 06/13/2012 - 00:19 | 2520425 Some Bloke
Some Bloke's picture

My plan is to wipe off all debts, design a computer program to add a few zeroes to the asset side, and then we're all set.

Now where's my Nobel prize...?

Wed, 06/13/2012 - 00:37 | 2520450 Conman
Conman's picture

Didn't they do that in Superman 3?

Wed, 06/13/2012 - 00:32 | 2520443 Irksome
Irksome's picture

Not sure if Tyler or any other editor here reads comments, but there is a minor typo towards the end.  '...  closer to $24 billion' should be trillion.  We could only wish that the 20 year debt ceiling limit could be measured in billions.


Wed, 06/13/2012 - 00:35 | 2520448 bankruptcylawyer
bankruptcylawyer's picture

krugman is this poster boy for hating. i'm tired of it. yea yea, most people are fucking morons and believe his nonsense---but so what?

the problem is that people need to wake up and start thinking. if it wasn't krugman as the poster boy nobel ass licking liberal globalist democrat economist, than it would be some other shit stain by another name that the sheeple would 'trust'. 


it's the sheeple that are the problem, not krugman. he's just another crack peddler. there are 100 to take his place should he float off and dissappear.

Wed, 06/13/2012 - 05:12 | 2520682 francis_sawyer
francis_sawyer's picture

He's as lovable as the 'Career Builder' monkeys in a conference room...

Wed, 06/13/2012 - 00:37 | 2520451 TahoeBilly2012
TahoeBilly2012's picture

Toots and Cliff are neck in neck as classic Reggae artists. Clash brought reggae to the white man, Strummer and  Mickey Dread.

Wed, 06/13/2012 - 00:39 | 2520454 Fantasy Planet
Fantasy Planet's picture

Can't we all just 'barter' our way out of this?  I'll mow your lawn 8,400x and you give me 300 pairs of used tires for my Dodge Mistake. 

Wed, 06/13/2012 - 00:59 | 2520462 newengland
newengland's picture

Crookman is a silly bint; an 'educated fool' and 'useful idiot' (Lenin). Crookman is a tool of the globalist central bank cartel, yet unaware of his chains, his propaganda, no different than any debt slave of the fictional non-reserve bank system, yet mithering others with his sophistry.

Tsk. His sort led the world to Stalin, Mao and Pol Pot who also pursued the Marxist agenda, paid for by Rothschild.

The EUSSR was the latest experiment. It is imploding under the weight of the latest socialist failed experiment.

I'm glad every time I see the world's oldest civilisations buy gold and silver, something that the Republic ought to emulate so that individuals can be free of political intrigue and sophists like Crookman.

Maybe he'll tell us next that only uncivilised jews sew their hems with gold coins whilst fleeing the new corporatist Nazis of his sort,  statists like him, New Fascists, New Feudalists like him.


Wed, 06/13/2012 - 01:02 | 2520480 GMadScientist
GMadScientist's picture

I see they've sapped and impurified all your precious bodily fluids, General Ripper.


Wed, 06/13/2012 - 01:06 | 2520489 newengland
newengland's picture

Sapped themselves. Bond vigilantes will have the final say on these matters.

Wed, 06/13/2012 - 00:50 | 2520465 Bohm Squad
Bohm Squad's picture

Krugman must be long's the only thing that makes sense!  :)

Wed, 06/13/2012 - 00:55 | 2520470 Bunga Bunga
Bunga Bunga's picture

My ATMs cut the cash withdrawal limit down by $200.  Last time this happened was in 2008.

Wed, 06/13/2012 - 01:08 | 2520491 Overfed
Overfed's picture

You need to have more than one account and spread the $$ around. Or buy silver.

Wed, 06/13/2012 - 01:25 | 2520510 Monedas
Monedas's picture

That's not as sinister as it sounds and is not designed to prevent runs on the bank !    ATM use has increased so's more like courtesy rationing and to lessen restocking nuissance ! If they dispensed $100 many ATMs would be chained and dragged down Texas highways behind pick-ups ?  Also, you can use your debit card in so many places, cash isn't so necessary !  I charged 15 cents worth of copies at an Office Depot copy machine !   I bought nachos at 7/11 on my debit card !        Monedas     1929     Comedy Jihad World Tour

Wed, 06/13/2012 - 02:48 | 2520618 Bunga Bunga
Bunga Bunga's picture

You can't use a debit card in a bank run anymore.

Wed, 06/13/2012 - 00:56 | 2520472 Stimulati
Stimulati's picture

It actually makes sense that more debt would solve the debt crisis if you, as Krugman has argued, shift the debt from sources that can't repay (middle class homeowners with decreasing income and home values) to sources that can repay (the US governement).  That is essentially what a jobs program does - the US government borrows to put money in the hands of the middle class who can now pay down their debt. 

Wed, 06/13/2012 - 01:03 | 2520481 Some Bloke
Some Bloke's picture

Che?  The US government is a repayer of debt? 

Wed, 06/13/2012 - 01:04 | 2520482 newengland
newengland's picture


Bullshit. Unregulated otc derviatives equal to ten times world gdp guarantee that only central banksters and their political pets will profit as their sophists like Crookman bleat on with their 'educated fool' and 'useful idiot' excuses.

Wed, 06/13/2012 - 01:10 | 2520496 James_Cole
James_Cole's picture

Yes, that is his argument and he uses world war II as an example. And in some ways it does make a lot of sense. 

The problem with this idea to my mind is unlimited $ but limited resources. There needs to be a return of dollars to tangible assets. Many countries are overconsuming because of surplus of currency, there will be a hard wall to this at some point.

If there were unlimited resources you could have a quadrillion $ deficit and it would be more or less irrelevent.  

Wed, 06/13/2012 - 01:11 | 2520501 Overfed
Overfed's picture

Sounds good in the short term, but sooner or later it has to be paid down for real, or held in default. The former is not possible the way they are going now, and the latter WILL come home to roost. Probably much sooner than any of us want to believe.

Wed, 06/13/2012 - 01:17 | 2520512 Stimulati
Stimulati's picture

That is why Krugman argued for lower deficits in the good years (pre-crisis) and argues for paying down the debt after the debt expansion, once the middle class balance sheets have recovered and the economy is moving again.  It's pretty easy to understand really.  Shame about the politics getting involved.

Wed, 06/13/2012 - 01:38 | 2520549 James_Cole
James_Cole's picture

There were no "good years" pre-crisis - corporate, personal and governement debt has all been going up precipitously since the 70's. 

Expansion of money supply has been rising at a frentic rate since then too, simply printing your way out can't work.

It's not a matter of timeframe either, short term printing just masks the problem. People may have more money of all of a sudden, but that money isn't backed by anything real. The whole thing is an illusion.

If everyone is bidding on one rock, it doesn't make the rock any more or less valuable depending on how much they bid if the money comes out of a printing press. 

Sorry, but as I said - limited resources is the key. 

Wed, 06/13/2012 - 01:45 | 2520563 Stimulati
Stimulati's picture

Money doesn't need to be backed by anything real.  We were talking about fiscal policy anyway.  Printing money and dropping it into a bank vault untouched isn't Keynesian and it isn't going to do anything positive for the economy.

Wed, 06/13/2012 - 02:11 | 2520596 James_Cole
James_Cole's picture

USD strength is because it is the reserve currency, everyone knows this. Here's a pretty basic general rule, the more abundant something is - the less valuable. 

Money supply needs to expand as an economy expands to keep up with trade, the problem since the 70's has been the money supply has gone way out of control relative to growth within the economy. At some point these two things will need to find balance. Would be most devasting for the poor and middle class as they are people with the fewest real assets. 

Wed, 06/13/2012 - 05:16 | 2520683 francis_sawyer
francis_sawyer's picture

currency collapses have a way of 'balancing' things...

Wed, 06/13/2012 - 11:46 | 2521971 Overfed
Overfed's picture

I don't know much about fiscal policy, but I do know that monetizing garbage debt or borrowing ad infinitum from the Chinese just to keep the economy treading water can't go on forever. Money backed by shit debt is worthless, and when enough people realize it, the whole thing is going crash through the floor.

Wed, 06/13/2012 - 00:59 | 2520476 Stimulati
Stimulati's picture

Paul Ryan is a fraud and anybody on this site should have the wherewithal to realize that.  His proposals would increase the deficit more than the CBO's Alternative Scenario if you don't count all of Ryan's "magic asterisk" savings.

Wed, 06/13/2012 - 01:09 | 2520495 newengland
newengland's picture


You are making a political point, and nobody in the financial world cares for the pretty pets of lying politics.

Obama, Romney: same toadies, bought and paid for.

Wed, 06/13/2012 - 01:12 | 2520503 Stimulati
Stimulati's picture

The author says Krugman and Ryan should debate.  That tells me the author has no credibility because he can't recognize the obvious fact that Ryan's own proposal is one of huge deficits cloaked as something else.

Wed, 06/13/2012 - 01:26 | 2520524 newengland
newengland's picture

Obama, Romney: bought and paid for.

Silly pets of politics like you and they have nothing to offer the world but excuses for being 'educated fools' and 'useful idiots'.

Crookman is the Goebbels of his time; tell a lie often enough and others will believe it.

Some others of low intellect...not all.

Wed, 06/13/2012 - 01:30 | 2520534 Stimulati
Stimulati's picture

Agreed, therefore you should go yell at your wall.  It would be a more productive use of your time.

Wed, 06/13/2012 - 01:55 | 2520574 newengland
newengland's picture


Your quick resort to ad hominem in a place like this where neither you nor I know each other or risk money proves that you are a pretty pet of politics like Crookman.

Play the point, not the person, if you want to be taken seriously. Your talk of politics like Crookman does nothing but excite your vanity.

Wed, 06/13/2012 - 02:01 | 2520584 Stimulati
Stimulati's picture

Now that's funny.  You call me a silly pet and then take offense at the ad hominem.  Thin skinned are we?  Go yell at the wall, I've no interest in what you have to say.

Wed, 06/13/2012 - 02:55 | 2520621 barliman
barliman's picture


3 weeks and 3 days?

OK, who let David Axelrod get an account again?!?

It's all fun and games until he wets the bed or shits himself again


Wed, 06/13/2012 - 01:09 | 2520486 Monedas
Monedas's picture

Keynes lived in a simpler time....when many recognized the evil of Communism and Fascism....but thought Socialism was something different and could be scientifically applied to remedy inate flaws in Capitalism....and a little monetary inflation was good to fine tune the free market's tendency to devour it's young !     What a naive crock of shit....and we are dealing with the consequences !   Krugman is prone to that kind of naivete and self delusion....even though he has had the benefit of history !          Monedas      1929        Any Deviation From Capitalism Implies Moral Hazard

Wed, 06/13/2012 - 01:11 | 2520497 Stimulati
Stimulati's picture

Keynesian theory generated the strongest middle class the world has ever seen in the 1950s and 1960s.  It was when Reagan and W started abusing the model by generating big deficits in the good years (among other things) that things started falling apart.

Wed, 06/13/2012 - 01:17 | 2520514 newengland
newengland's picture


Incorrect on all counts, you silly pet of superficial politics.

Wed, 06/13/2012 - 01:29 | 2520531 Monedas
Monedas's picture

And where is that enduring middle class ?  Keynesian economics has resulted in comfortable, arrogant bureaucrats and SERFS !

Wed, 06/13/2012 - 01:42 | 2520556 James_Cole
James_Cole's picture


Wed, 06/13/2012 - 01:50 | 2520571 newengland
newengland's picture



Wed, 06/13/2012 - 02:02 | 2520586 Stimulati
Stimulati's picture

Robbed blind by Reagan / Greenspan / Friedman

Wed, 06/13/2012 - 05:45 | 2520698 Zero Govt
Zero Govt's picture

you left out a loooong line of Democrat thieves

how's socialism doing regenerating Detroit and Chicago by the way???

Democrats have been in power there decades, how has spreading the wealth around (spending other peoples money) doin? ..has it enriched the poor or just enriched the socialists behind Govt desks (aka USSR)

Wed, 06/13/2012 - 01:13 | 2520502 James_Cole
James_Cole's picture

Monedas.... maybe a quick google search before posting. Save you some embarrassment. 

Wed, 06/13/2012 - 01:32 | 2520536 Monedas
Monedas's picture

I don't embarrass so easily....if I did, I'd be another meek Socialist !

Wed, 06/13/2012 - 01:42 | 2520557 James_Cole
James_Cole's picture

Ignorance is strength. 

Wed, 06/13/2012 - 01:14 | 2520506 newengland
newengland's picture

Keynes the aggressive sodomite admired Marx, Lenin and Hitler. He was a paid pet of the globalist central bank cartel, the Rothschilds who later founded the Trilateral Commission which seeks a new world order of technocratic government, led by central banks.

Crookman is a silly bint, unaware of the political intrigue that exists beneath his grovelling failed theories.

Wed, 06/13/2012 - 01:23 | 2520522 Stimulati
Stimulati's picture

newengland the aggressive sodomite admired Marx, Lenin and Hitler. He was a paid pet of the globalist central bank cartel, the Rothschilds who later founded the Trilateral Commission which seeks a new world order of technocratic government, led by central banks.

See how easy it is to slander somebody?

Wed, 06/13/2012 - 01:41 | 2520547 newengland
newengland's picture

Slander is the spoken word. Libel is the written word. Either way, everything I wrote is true. So sue me, Crookman's fan.

As a decent person, I ought to inform you that a libel action cannot be prosecuted in defence of a dead person, you silly pet of politics who seeks to intimidate, like your Crookman.

Wed, 06/13/2012 - 05:53 | 2520704 Zero Govt
Zero Govt's picture

Stimulati  -  consider yourself well and truly bitch-slapped

now go polish Professor Krugmans shoes, he's got class in 15 minutes, a whole new generation of Princetown Marxist 'economics students' to propagandise and set forth into the free, sorry structured world of Democrat Party activists, State funded charity work, climate change 'research' and Govt quangos

Do NOT follow this link or you will be banned from the site!