Krugman, Gingrich hint at Second "Stimulus"

[freemarketblog]

http://digg.com/politics/Krugman_Gingrich_hint_a_Second_Stimulus

Former Speaker of the House Newt Gingrich and economist Paul Krugman both admitted and agreed that another "stimulus" package is well on its way. This comes after Gingrich noted that by April 25th, all tax revenues collected this year will have been spent meaning all subsequent expenditures will be pure deficit spending.

[James Madison]

Second? Hasn't there already been at least three?!

[Imperial]

I think I have heard rumors of as much from Bernanke, Geithner, and Obama too. At least, they say they can't guarantee there will not be a second.

[sevin]

Let me see if I got this logic right...

I spend my entire pay for the year by April 25th. In order to improve my situation, I should get through the rest of the year with credit cards?

[freemarketblog]

Let me see if I got this logic right...

I spend my entire pay for the year by April 25th. In order to improve my situation, I should get through the rest of the year with credit cards?

You have graduated with a degree in mainstream economics. :D

[reduen]

Did Krugman really say that we were not remotely in trouble with our debt to GDP only at 60%..?

Did he really say that we could go well over 100% and be ok...? :confused:

[freemarketblog]

Did Krugman really say that we were not remotely in trouble with our debt to GDP only at 60%..?

Did he really say that we could go well over 100% and be ok...? :confused:

Mainstream economists are quite interesting folk. All they care about is aggregate demand and pushing that curve to the right.

[hugolp]

Mainstream economists are quite interesting folk. All they care about is aggregate demand and pushing that curve to the right.

While making the debt grow.

[freemarketblog]

While making the debt grow.

Yep..the debt is irrelevant so long as we have a big enough GDP (in their view). Interestingly enough, the bulk of GDP is based on consumption. Since America's savings rate was just recently at 2%, and consumer debt somewhere around $14 trillion, all of our consumption was based off of accumulating debt. So we had a very high GDP number, but it was obtained literally through borrowing.

The GDP is a worthless figure in my view. A country that borrows and borrows and borrows money could have the world's highest GDP number and considered the "wealthiest" nation, yet they could very well be the poorest since they owe so much in debt.

[MPN]

I would point out that it is important to remember that Paul Krugman is a hair pulling wildman.