This is why I love reddit.com, and the internet in general
Paul Krugman, nobel prize winning economist, decided to do an IAmA (“I am a…”) today. The way this works: questions are submitted as comments and the comments are rated. The person doing the IAmA then replies to the comments. The current top rated question (it might change over time) got this response:
So, hi — I’m here and on.
Let’s start with the inflation issue. What we want is “appropriately” low rates — which in this case means negative in real terms. Excessively low rates can cause problems, but we’re nowhere near there right now. And for what it’s worth, I don’t buy that story about the bubble at all; what went wrong in 2000-2007 was runaway unregulated banks, not too-low rates.
About the deficit: the thing you need to realize is that a weaker economy means lower tax receipts. Slashing spending now hurts the economy in the short run, offsetting a large part of the initial saving. It also hurts the economy in the long run. So when you do the full arithmetic, you probably make the debt problem worse, not better.
About partisanship: I don’t think I’m being partisan, I think I’m being honest. The way many people try to seem nonpartisan is by pretending that bad ideas aren’t really bad, which I won’t do. It’s not partisan to say, for example, that Paul Ryan’s budget is a fraud. It’s just the uncomfortable truth.
This answer illustrates why I love Krugman, too. Honest, direct and very simply written (he’s much better in print, IMO). The comment about partisanship is dead on. Wrongly throwing that label around is a desperate play by actual partisan hacks.
Here’s a summary of all questions and answers.