August 12th, 2011
02:09 PM ET

Watch GPS: Krugman calls for space aliens to fix U.S. economy?

On GPS this week, we explore the most important topic (the economy) with the most important economic voices. Fareed Zakaria talks to Nobel Prize winner Paul Krugman and Former IMF Chief Economist Ken Rogoff.

The show also turns a myth on its head. China’s not doing the U.S. a favor by buying its Treasury Bonds - the pleasure is very much China’s. We’ll explain.

All that, plus a fascinating look at America’s fractured relationship with Pakistan with the journalist Ahmed Rashid, and a smart, macro look at the London riots with two top British thinkers.

But first, why does Paul Krugman say space aliens could fix the U.S. economy? Here's an edited excerpt of what he and Ken Rogoff had to say:

Ken Rogoff: Infrastructure spending, if it were well-spent, that's great. I'm all for that.  I'd borrow for that, assuming we're not paying Boston Big Dig kind of prices for the infrastructure.

Fareed Zakaria:  But even if you were, wouldn't John Maynard Keynes say that if you could employ people to dig a ditch and then fill it up again, that's fine, they're being productively employed, they'll pay taxes, so maybe Boston's Big Dig was just fine after all.

Paul Krugman:  Think about World War II, right? That was actually negative social product spending, and yet it brought us out.

I mean, probably because you want to put these things together, if we say, "Look, we could use some inflation."  Ken and I are both saying that, which is, of course, anathema to a lot of people in Washington but is, in fact, what basic logic says.

It's very hard to get inflation in a depressed economy.  But if you had a program of government spending plus an expansionary policy by the Fed, you could get that.  So, if you think about using all of these things together, you could accomplish a great deal.

If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better -

Ken Rogoff:  And we need Orson Welles, is what you're saying.

Paul Krugman:  No, there was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace.  Well, this time...we need it in order to get some fiscal stimulus.

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Topics: Economy • Global • GPS Episodes • GPS Show • Jobs

soundoff (336 Responses)
  1. Brian Smith

    Finally! Paul Krugman makes it onto GPS! Somebody worth listening to! I think you should look at the chart in this link and discuss why Obama looks as if he is going to lose to a generic Republican candidate (http://www.realclearpolitics.com/epolls/2012/president/us/general_election_president_obama_vs_republican_candidate-1745.html). Remember what Arianna Huffington said on your program, Obama's strategy is dissatisfying independents as well as liberals. That means Obama is losing support among those independents and centrists you love so much.

    August 12, 2011 at 3:02 pm | Reply
    • Kim

      I was entertained by this article, but I agree with a lot of other people that it's just more theory and ideas, with nothing definite we can line up. Of course, even if the economists came up with some wonderful spot-on plan the politicians would mangle it into something unrecognizable before they voted it in. (See Obama's health care plan, it ended up so mutated it might as well have three arms and five feet.)

      The problem we have is Obama isn't going to be running against a generic Republican, he's going to be running against one of these far right-wing Republicans.

      I don't know where these guys came from (maybe the Kuiper belt?). I'm registered Republican, but I'm no longer sure why. The current GOP is unrecognizable to me. Obama is pretty far left for my tastes, but he hasn't launched into the stratosphere like a lot of Republicans have.

      I doubt I'd ever be a "real Democrat" but I guess now I'm not a "real Republican" ... well, okay, I guess I'm not a Tea Party Republican. I see a gaggle of demagogues with no experience running around saying how they're going to "clean up Washington" while breaking everything they touch.

      *sigh* Vote the Lesser of Two Evils, whoever that is, 2012.

      August 18, 2011 at 1:34 am | Reply
      • WHSJ

        Welcome to the "Independent" group.

        August 18, 2011 at 8:05 am |
      • heather

        Kim, I am with you. All of my Democrat friends here in Los Angeles are also inclined to leave the Democratic Party, but where would that leave our centrists? The Tea Baggers are truly a frightening lot.

        August 19, 2011 at 4:04 am |
      • JosefBleaux

        I don't want to leave the Democratic party, I just want to be able to vote for a moderate Democrat next election who will get thing done. Hopefully such a candidate will beat out Obama for the nomination. If it were a choice between a teabagger or Obama, I guess I'd vote for Obama but I'd hate to have to make that choice.

        August 19, 2011 at 10:52 am |
  2. Jai

    Was the Iraq WMDs Bush's attempts at exactly the same thing? Aliens may be too preposterous, WMDs.. may be not? Sadly, we didnt see that bring us out of the slump. Or am I missing some other point that will make this alien hypothesis work?

    August 12, 2011 at 10:20 pm | Reply
    • Chris

      The reason why the Iraq buildup didn't have a stimulating effect is because it used resources which were already in place. For WWII, we used our entire economy and our entire population in the act of waging war. Though Iraq has cost the government a lot, our economy already had a large enough war machine to support it. If aliens were attacking us, first of all, I think that we would have no chance, but you'd see huge amounts of money flowing to new research and I think no one would be complaining. 😛

      August 12, 2011 at 10:27 pm | Reply
      • Jordan

        That's half true. Pretty much all of the aircraft (aside from the newer UAVs and maybe some V-22s) were already in the inventory, same goes for the seldom used tanks (great when the enemy has tanks, big hunks of steel taking up space when they don't and you're fighting in mountain caves and in streets) and the warships. However, plenty of smaller transport vehicles had to be produced (as Hummers, unsurprisingly, proved unsuited for a combat environment) and perhaps most importantly, we've had to step up missile production as the stockpile is burned through surprisingly quick. There's a lot of money in missiles, check out Raytheon's recently awarded contracts.

        August 14, 2011 at 5:01 pm |
      • Mike Anders

        A lot of spending went to the IC, particularly DoD with respect to ISR as was mentioned. As far as tanks are concerned, the M1A1 behaved surprisingly well in the counterinsurgency role and saved many lives including Iraqi lives. Unfortunately, you will have to wait another ten years for the story to be told in detail. It seems in every war since WWI, armies have to relearn the benefits of armored vehicles of all types. Iraq was no different. Not a criticism, just an observation.

        August 15, 2011 at 10:44 am |
  3. Wild Bill

    I love Krugman but he's dead wrong. It was the Outer Limits, not the Twilight Zone in which scientists fake an alien invasion to achieve world peace. The episode was called "Architects of Fear" and aired in 1963. But on economic matters, dude is still a flippin' genius.

    August 12, 2011 at 10:52 pm | Reply
    • hillman

      u r right i have all five seasons of the twilight zone very awsm every year they go up in value

      August 14, 2011 at 6:57 pm | Reply
    • jdhartlv

      Same time as "The Report From Iron Mountain."

      August 16, 2011 at 2:28 pm | Reply
    • jdhartlv

      So we should continue to listen to those that advocate for one world currency, and government no matter what the cost?

      August 16, 2011 at 2:37 pm | Reply
    • Craig

      Dude, no offense, but if you think Paul is a flipping genius, then you are not very bright.

      August 18, 2011 at 12:54 pm | Reply
    • quackz

      Yes Professor Krugman is all we have against the forces of downright evil. No need for aliens.

      July 28, 2012 at 11:27 am | Reply
  4. Not You

    Sad to say, Krugman's alien theories make more sense than his Keynesian economic theories ever will.

    August 13, 2011 at 1:52 am | Reply
    • epi

      Clearly you are much more qualified than Paul Krugman to discuss the needed actions to correct our depressed economy; and you should have been on the show to debate Krugman so you could have told him his "... aliens theory make more sense than his Keynesian economic theories ever will". You should really try to get in contact with Krugman to let him know he has been wasting his time.
      Comments such as yours are simply pathetic and you should be embarrassed by them. If you actually have something insightful to say, then by all means say it, but provide some justification for your comment. Educate yourself on the issues at hand before you open your mouth (or type on your keyboard); you and everyone else will be better off for it. I am directing this comment not just at you, but every other baseless comment.

      August 13, 2011 at 10:00 am | Reply
      • Michael

        Whose comment is more pathetic?

        August 14, 2011 at 4:13 am |
      • MikeMN

        You are right; Paul Krugman is indeed a waste of time.

        August 14, 2011 at 5:20 pm |
      • Aaron

        Doesnt take a degree to hold common sense. To quote one of Krugman's fellow Nobel Prize winners Al Gore "the interior of the earth is extremely hot, several million degrees" Hah, of course Al kind of is supporting his Alien idea, invest into a made up cause... so how is shutting down domestic oil and continuing importing foreign fuel where production isnt regulated good for the environment or jobs.... well who knows but at least all of Al's friends invested in bs gov subsidized "green" energy are doing great! You idiots are pathetic, assuming these tards know so much more than you, it's not that complicated.

        August 16, 2011 at 10:26 pm |
      • Craig

        Ok then, some backup to why Krugman is clueless. He thinks we can completely spend our way out of this hole. The man would run us past the 20 Trillion mark if he could. We are at point of no return NOW. Do the math, we cannot pay off the debt with current govt revenues, straight and simple. WE ARE DONE FOR. He contributed.

        August 18, 2011 at 1:06 pm |
    • 14TRILLIONindebt

      Amen brother.

      August 15, 2011 at 1:06 pm | Reply
    • Guest

      I think the alien theory doesn't make any sense at all! The economy is about producing something that benefits the society. Producing defenses against fake alien doesn't help anyone, it just a waste to our planet's scare resources.

      August 18, 2011 at 12:23 am | Reply
  5. Cam Rankin

    Um, the United States is not set up to be a welfare state, nor is it suited to interfere with our day to day lives. The people should help the people, there is enough food and resources to feed and sustain our people, but it is not the governments job to do it. We are a caring people, so lets embrace capitalism, less government and take care of each other, that's what Americans do. Have some pride America, WE ARE THE BEST! BE GREATEFUL!

    August 13, 2011 at 2:09 am | Reply
    • Ed

      @Cam.. nuts...

      August 15, 2011 at 7:58 am | Reply
  6. AO1JMM

    We need Aliens!!!

    August 13, 2011 at 5:53 pm | Reply
  7. jazz

    CUTE....but its a bit late...were already here...prove we arent.

    August 14, 2011 at 12:40 am | Reply
  8. jazz

    ..and not all of us INVADE.

    August 14, 2011 at 12:41 am | Reply
  9. Isabelle Idler

    Only the Aliens can save us now!! http://www.insuranceadjustertraining.net

    August 14, 2011 at 1:08 am | Reply
  10. Rick

    the way they make it sound in ALL of our different media sorces that there WILL be an alien invasion. Im not a conspiracy theorist but all of the comments on alot of these sites and what I've heard alot of people say is that it will be staged to kill off the population. I hope that's not the case but sometimes I wouldnt doubt it. The mainstream media is obviously trying to tell us something with all of the celebrites doing the pyramid symbol and all knowing eye.

    August 14, 2011 at 2:12 am | Reply
  11. Lee

    CNN/fareed zakaria, Today listening to analyst about why London burned? doesn't anyone think that the police killing 0ver 430 people in "Police custody" in the last 12 years, an equivalent off 1 murder a every month for 12 years! with no answers from inquires in all this time? none dismissed , none charged for the killings? just promotions!? have nothing to do with it? after a while everyone in every city can quote someone they know or heard off killed by police who act like there above the law! as they will never be brought to justice for their crimes instead patted on the back? I don't condone the looting but this is just a symptom off riots not the cause! they need to find fix the cause i.e like murdering policemen whom constantly lie to cover their backs after a killing if they speak at all! An investigation seem to be the government and heads off police buzz words to make the inquiry go away! as 12 years on and not one sufficient answer or arrest off any policemen for these murders or executions! just a few name
    http://unityequalitypeace.wordpress.com/kingsley-burrell-brown-his-story/
    " how quickly they have come back with response to the Mark Dugan case, do we have answer's for the Kingsley Burrell, Smiley Culture, Demetri Frazer RICKY BISHOP – Murdered in Brixton Police Station in 2001 ,these are just the black men that have died this year in police custody that we know off....out off the 430+ that has been killed in police custody in 12 years!

    August 14, 2011 at 9:15 am | Reply
  12. rose macaskie

    epi youshould have exxplained your poswition fully people are frightened to talk at length they dont feel that they are the ghandi around they dont explain hard aenough so i understand your not explaining it but you did wha tyou accused "not you" other of doing.

    August 14, 2011 at 9:32 am | Reply
  13. Burbank Burner

    You call a discussion between and Marxist (Krugman) and a Socialist, (Rogoff) a debate? Since all of Krugman's Keynesidan solutions have failed totally and miserably, he has no credibility. He is a colossal fool, only given serious consideration by leftie lunatics who destroy economies and cultures, never fix them.

    August 14, 2011 at 10:30 am | Reply
    • Tim Buckley

      "You call a discussion between and Marxist (Krugman) and a Socialist, (Rogoff) a debate?"

      Looks like you have no idea what either of those words mean. Please Google around and learn the actual definitions.

      August 14, 2011 at 5:15 pm | Reply
    • wallybob

      either redistribute the wealth or become a failed state.

      August 14, 2011 at 6:25 pm | Reply
  14. Mark Engler

    Fareek: The #1 problem is not the economy, as politicians, the media, and much of the public are habituated to think. Rather, it is the collapse of a global civilization, the same phenomenon that caused the collapse of all known prior civilizations, via what anthropologists term civilizational hubris, i.e. our ignorance of laws of nature that supercede human power. You and your guests are brilliant, but somehow constrained to thinking within boxes of politics and economic laws of the past. You think in terms of politics, your guest Krugman in terms of economics of the past, your guest Rogoff more creatively in terms of trying to define the here and now financial crisis that will not be addressed by methods from the past. The natural law that is destroying us is Malthusian, there are simply too many of us, and our systems are really controlled by the wealthy, so wealth is rapidly being redistributed, enslaving more and more poor people in a global oligarchy... I, and many others, have answers to a more realistically defined #1 problem, e.g. google "sociocracy" and "holocracy", as our democracy is obsolete and needs revolutionary amendment. We can no longer divide ourselves into majorities, minorities, and pluralities because that only accelerates the pace of the collapse of civilization.
    Sincerely yours,
    Mark

    August 14, 2011 at 10:35 am | Reply
    • wallybob

      for example, global warming will get us before deficits will. that is the malthusian part. the chinese rivers run red or green with whatever chemical produced. the sea is rapidly dying. 1.5 billion students have no job prospect. automation in the hands of the rich is making workers by the billions obsolete. the consolidation of wealth is increasing.

      August 14, 2011 at 6:30 pm | Reply
    • Cason Snow

      1.5 BILLION? Wow. That's impressive, since that far outnumbers the students graduating within the next few years.

      August 17, 2011 at 7:48 pm | Reply
      • aardvaaaark

        graduating from where? You assume college? How about all schools......

        August 20, 2011 at 12:35 pm |
    • Craig

      Or more simply, growth cannot be perpetual, natural resources are running out, and soon enough, we will be in full-time catastrophic mode, WORLDWIDE!

      August 18, 2011 at 1:13 pm | Reply
  15. pearle78223

    Hooray for Krugman! He should be on CNN more often. Far more intelligent than most of your usual commentators.

    August 14, 2011 at 12:01 pm | Reply
  16. dave1

    First, Ken Rogoff is no Socialist, even if Paul Krugman has indeed seemed to be leaning much more that way since becoming a 'media scholar'. What they are each proposing is the Keynesian principle of increasing the circulation (or velocity) of economic goods by exogenously inducing an increase in aggregate demand. You might think of a hypothetical hydraulic pump whose volute is made of rubber. If you could somehow stretch the volute to twice its size, then the hydraulic throughput would indeed increase.

    The theoretical problem of course faces the practical reality that the volute must eventually return to its natural size, at which point its excess reservoir of water is expelled. The economic analogue will be either a) wealthholder losses to inflation or b) wealthholder losses to taxation.

    Keynesianism only works to the extent you are prepared to dismiss these very real losses in favor of nominal growth. A more honest way to frame a Keynsian action would explicitly provide how wealthholders are held harmless. That is a rather taller order than what Krugman is offering.

    Suppose capital is guaranteed the full product of the expansion? Why, well, because labor is in excess – some 18% of it has no marginal value under the current environment. Well, then returns to labor are (intertemporally) zero, even if it receives a wage in the short run. So, you are looking at a guaranteed giveback by wageearners in the future.

    That ensures a contraction at that time. The private sector, anticipating that contraction, should pull in its horns in advance, providing a counterstimulus in the present, opposing public sector stimuli.

    So, you see, there is no free lunch. Only expropriation.

    I believe that this economy will not, in fact, be susceptible of Keynseian stimulus. Rather, we shall have to endure the much longer process of very gradually rebuilding consumers' animal spirits within the context of the private sector, which will take a rather longer time.

    August 14, 2011 at 12:37 pm | Reply
    • Eric G. Bostrom

      Over the last four decades the world's economic growth has seen the U.S. proportion of the world's creation of wealth go from 40% to 20%. This is understandable because by the early 1970's the U.S. had achieved maximum development just as it's industrial production lost the ability to compete for the global market with the dominance that it had had for decades. Ironically, our economic models have treated phenomenon like these to be exogenous to the models to which economic models decribe - which is the distribution of goods and services in markets. We really need to understand that these theories from the Keynes and Hyack don't help us to determine how to make wealth to infuse into this system, nor the optimal ways of producing goods and services over the long run, because all these important processes are exogenous factors to the models being considered.

      If we look at the behaviors of businesses' managers we don't see the kind of enlightened self-interest that is presumed by equilibrium models. The often get caught up in irrational behaviors that have bad results that only minds free from involvement in the markets could possibly control rationally.

      August 14, 2011 at 1:46 pm | Reply
  17. Bezinga

    The answer is “by making movies"

    August 14, 2011 at 12:54 pm | Reply
  18. Jon

    Krugman is proof positive that you can be an academic intellectual and know nothing about the real world.

    August 14, 2011 at 1:17 pm | Reply
    • EmptySkull

      And are you both, neither, or just in the real world with no intellect?

      August 17, 2011 at 12:57 pm | Reply
      • Craig

        He is right, and your name is obviously not just an attempt to be cool.

        August 18, 2011 at 1:17 pm |
    • Craig

      The scary thing is, I think he might know, but he is so driven by a liberal agenda, he completely closes off to the idea that his method might not work. And this is from a hard left-winger.

      August 18, 2011 at 1:19 pm | Reply
  19. Eric G. Bostrom

    This was a very informative discussion but I saw a dominant perspective which I think must be altered. Economics is the only social science with a unified theory that tends to allow discussions over policies that focus upon changing this or that factor, like we must increase demand, focus upon supplies, managing debt, etc. It rests upon a presumption that the economy can be described based upon equilibriums in the economy which permits models that can be examined with mathematical descriptions. The presumption is that we can describe economic phenomena as being linear in nature.

    In reality, economics is not linear. It is complex, it includes related processes as well as interrelated processe and unrelated processes at any particular time. It includes processes that resemble change of state processes (where any possible state can be operating in parallel with many others). The global economy affects local economies and vice versa, too.

    The disagreements between economists reflects the complexity, with economists tending to pick and choose what measures that they see to be more crucial to forecasting. Their convictions about the accuracy of their forecasts reflects their presumptions of linearity and simplicity in the models that they have concluded are representative of the economy.

    August 14, 2011 at 1:29 pm | Reply
  20. A.M. Deist

    Excellent debate. Paul Krugman pointed out his concern over individual debt. We have a much larger problem than individual debt or Government Debt or deficit. Most American Corporations operate bleeding red. Although companies like Google, Netflix, Priceline, Apple, and Humana have significantly more cash than debt, most American Companies are in debt up to their eyeballs. IBM, Exxon, Proctor and Gamble, Sears Holding, Hewlett Packard, Aetna and Dominos Pizza are just a few examples. You will hear that American companies are sitting on $2 trillion in cash, but if you add up all American companies on all three of our stock exchanges, and total their cash and their long term debt, you will see that our companies are in much worse shape than our citizens. One might point out their excellent revenue, but if our economy goes south, those revenues are going to dry up fast. Right now, we are operating in a self fulfilling prophesy of doom. By cutting spending alone, we cut jobs. Cutting jobs cuts revenue. Cutting revnue requires more spending cuts to balance the budget. We are operating like a family that is under water and continues to get more credit cards and more loans as long as they are able, and goes on a spending spree to incur more debt until someone shuts them down. It isn't a question of if, but of when, and it will be a very hard landing.

    August 14, 2011 at 1:51 pm | Reply
    • Arjay

      Exxon "up to their eyeballs in debt"?? Hardly!! Take a look at their June 30, 2011 balance sheet. 72.3 billion in current assets vs 74.5 billion in current liabilities. 326.2 billion in total assets vs 170.6 in total liabilities which allows both Moodys and Standard & Poors to assign them a triple A debt rating. Much more difficult to achieve than for the US Government in that Exxon can't print money to pay off debt like our government can. So much for your argument!!

      August 14, 2011 at 11:10 pm | Reply
  21. Ernest

    Great Putin clip. What a guy! But, at least he can make a decision and stick to it.

    August 14, 2011 at 2:04 pm | Reply
  22. al

    I'm disappointed to see a sound bite featured rather than the whole discussion. Why do you think so little of your viewers?

    August 14, 2011 at 2:07 pm | Reply
  23. al

    The more I think about the way GPS handled the Krugman-Rogoff segment the worse it seems. The staffer who is responsible needs to be doing something else.

    August 14, 2011 at 2:21 pm | Reply
  24. Brian

    The Dems are certainly not great, but what bothers me about the entire GOP field is a lack of substantive solutions. We have 16 months till the next election - What legislation exactly, will the GOP champion during that time, that will help the economy? My guess is they will obstruct, filibuster, and block anything that could possibly be construed as helping the economy get better - all because any improvement will help Obama and the Dems keep control. Even though S&P said the Partisan bickering, along with the GOP's anti any Revenue stance, was cited as two of the main reasons for the downgrade. It is good politics just to blame the other party for our debt, when in reality , both parties are culpable. The Tea Party are the Hooverites of the 21'st Century, and offer the same Fiscal Austerity card, Hoover used, which caused Unemployment to soar from 9 to 25% during the Great Depression. It is not Rocket Science - If Govt. is the Countries largest employer, (Which it is) if you cut Trillions from the budget it will result in massive unemployment and reduced Revenue. It will create a whirlpool effect of decreased GDP. That is the fact. Its all been tried before during the Depression. The only true solution to our debacle is Lower Corporate taxes to 15% in line with the world's lowest, Repatriate offshored money without penalty, and Revise the tax code through a VAT, a Flat Tax, or National Sales Tax, with appropriate exemptions for the poor and elderly.End Income as a source of Revenue and we will end the two party stranglehold on Govt. A National Sales Tax would allow us to tax Imports without breaking Intl. agreements. The Tea Party will inadvertently create The Great Depression through Austerity. This is the Unintended Consequence of Fiscal austerity without fundamental tax Reform – We don't have just a spending problem ( IRS stats prove the Bush Tax cuts substantially lowered the Govt's Revenue from 18.5 to 14.9%) We have both a spending problem and a Revenue problem - To address one without the other is to both lengthen and court disaster.

    August 14, 2011 at 2:36 pm | Reply
    • John Gelles

      I left a supporting reply - but nothing seems to have been accepted.

      August 14, 2011 at 3:59 pm | Reply
    • 14TRILLIONindebt

      Currently the GOP only control the House of Representatives in DC. Nothing they propose to fix the economy (like repeal of Obamacare) will pass the Democratic controlled Senate or be signed by Obama. The best that can be hoped for is the reduction of spending and investigations into fraud, waste and abuse.

      August 15, 2011 at 1:15 pm | Reply
    • Matt

      Taxpayers pay for government jobs. The more government jobs there are, the more taxes the taxpayers have to pay to support those jobs. It's a zero sum.

      August 18, 2011 at 6:02 pm | Reply
  25. Scorpio9

    I have a question regarding the economy & markets.
    Just why is that bond holders have no risk when they purchase bonds?
    I thought that every investment carried some risk of loss, but now it appears that they only investment safer than US Treasuries is sovereign debt.
    I am more than a little shocked that these investors have been isolated from risk of loss.
    Would someone explain to me why this is so?
    If the current investors were to shy away from future purchases, wouldn't there be other to take their place.
    Or has the concentration of wealth become so limited that only a few are in a position to buy debt/bonds?

    August 14, 2011 at 2:50 pm | Reply
  26. John Gelles

    Fareed, Paul and Ken have all missed the most important Keynesian point:

    We must understand that a "monetary system of production" produces both NEEDS (which are scarce and must be produced by an economy and distributed to people in need) and it creates the MONEY with which to buy them - and sustain a virtuous effective exchange cycle.

    Therefore, there is NEVER too little money on hand to employ all idle production facility owners and managers and workers. There is only TOO LITTLE output of produced needs to motivate the love of MONEY that will fuel continued effort.

    If we had the threat like WWII to mobilize the economy, it would not be 18 months, but rather 18 weeks, to end the jobless monkey-wrench in the global economy (wherever unemployment exceeds 3%).

    We would see that MONEY (as a shortage) is only one half the money-coin. The other half is the THINGS THAT MONEY CAN BUY.

    As to debt it can always bought for cash at a steep discout or long term bonds at par.

    MONEY is not tangible like gold coin - it is an accounting system to facilitate PRODUCTION of needs. The history of money over centuries is interesting. But more important is the history of mass production over recent decades which is ready to go into orbit.

    The idea that such production is too high for current monetized demand is an idea that Rogin is stuck with but Krugman knows is wrong. Current monetized demand must be made to match current production potentials.

    August 14, 2011 at 3:19 pm | Reply
  27. Lost Generation

    Ancient aliens ran away from EARTH!!! They saw the mayans and failing people.

    August 14, 2011 at 3:56 pm | Reply
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