WATCHING DEVOTEE KRUGMAN MAKING PUJA AT THE ALTER OF LORD KEYNES IS NICE... BUT COULD BE WRONG...
WHERE'S WHY...
PUTTING STIMULUS IN A FLACID ECONOMY IS LIKE PUTTING AIR IN A FLAT TIRE...
IF THE TIRE ONLY HAS A SLOW LEAK...THE AIR WILL FILL IT UP...AND YOU CAN GET TO A REPAIR SHOP AND FIX THE TIRE...
SO TOO...STIMULUS IN A CYCLICALLY DOWN ECONOMY WILL ALLOW YOU TO MITIGATE THE DAMAGE AND GET AROUND TO DOING STUFF THAT WILL PUT THE ECONOMY BACK ON A SUSTAINABLE PATH...
BUT WHAT IF THE TIRE IS TOTALLY BLOWN OUT...RIPPED...OFF THE RIM...?
WHAT IF THE US ECONOMY IS STRUCTURALLY DAMAGED AND HAS A MASSIVE "HOLE IN THE BUCKET" CALLED THE TRADE DEFICIT...
WHAT DOES STIMULUS DO THEN...? IT ONLY INCREASES THE TRADE DEFICIT...AND PILES ON DEBT IN AN INFLATIONARY FRENZY...!
REMEMBER KEYNES COULD NOT HAVE ANTICIPATED THAT THE FED WOULD GO "BUBBLES FOREVER" IN 1945...!!
IN SHORT...KRUGMAN CAN OFFER PUJA TO LORD KEYNES...BUT I'M NOT SURE THE KEYNESIAN IDOL IS "JUICED UP" AND WILL RESPOND AS EXPECTED...
