Monday, October 19, 2009

More on why the deficit doesn’t matter in this economy.

Economist Paul Krugman provided further explanation as to why the concern for budget deficits in today’s economy just doesn’t make sense at a September 30 meeting at the Economic Policy Institute. Actually, says Krugman, we are spending too little to stimulate the economy, not too much and “the notion that we’re going to pay a heavy price (for deficit spending today) is wrong.” He went on to argue that that investments made today to help create jobs and strengthen the social safety net would be good for the economy both now and in the future.

Click on the link below to see a video with Krugman’s remarks as well as those of others on the panel. Scroll down and click on the Krugman Jump Point to see just the Krugman presentation.

At the same meeting, Economist J. Bradford Delong said the deficit scare is because many people are “unable to distinguish between short-term deficits that are good in a recession and long-term structural deficits that are bad in a generational context.” His talk follows that of Krugman.

You can download a pdf transcript by clicking on the link under “Supplemental Downloads” on that page.

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