Paul Krugman: Washington’s deficit obsession has been utterly, totally wrong-headed.

Paul Krugman: Washington’s deficit obsession has been utterly, totally wrong-headed.

Yes folks, this is the kind of insanity we are forced to deal with when it comes to dealing with the left wing. The markets get cracked for close to 5% as Italian bonds go to 6.2% and the world panicks over european debt, and this jackass thinks that because U.S. bonds are at 2.5% that we have nothing to worry about as it pertains to our spending.

He mysteriously neglects to mention the fact that the fed is keeping rates artificially low with QE1 and QE2, and also neglects to mention that the reason Italian bonds are so high is due to fear of deafult, and that the same fear of default is what is causing the market to fall apart, and that is what is coming in the U.S. if we dont do something to fix iour spending. Lets just keep spending! This keynesian b.s. is bound to pay off eventually.

Krugman is insane.



Rates of Wrath
Not good news in stock markets — but you really have to look at the bond markets to get the full awfulness of the situation.

The US 10-year bond rate is now down to 2.5%. So much for those bond vigilantes. What this rate is saying is that markets are pricing in terrible economic performance, quite possibly a double dip. And it also says that Washington’s deficit obsession has been utterly, totally wrong-headed.

Meanwhile, Italy’s spread against German bonds is soaring even further. What are markets pricing in here? Default as a real possibility; maybe even euro breakup. The latter certainly sounds a lot more plausible now than it did a few months ago.

Oh, by the way, how do I know that falling rates in America and rising rates in Italy are both bad news? Part of the answer is that you have to look at the context. My old teacher Charles Kindleberger used to say about balance of payments analysis that everyone wanted a single number that told you whether things were good or bad, but what you really needed, always, was a story.

But if that doesn’t satisfy you, you can always make sure to look at more than one market. Italian stocks are plunging, which tells you that the rate rise isn’t about economic optimism; so are US stocks, which tells you that our rate fall isn’t about optimism regarding US solvency.

http://krugman.blogs.nytimes.com/2011/08/04/rates-of-wrath/

 

Krugman has demonstrated time and again that his economic analysis has no basis in reality. How anyone who has studied economics can make the statements he does with a straight face is a mystery. Surely it is a sign of some form of mental illness.

 

He is nothing more than a political commentaor, he sure as hell is not an economist, he was crying about deficits during bush's term when deficits were 300 billion, now he is saying that we need to spend more when deficits are 1.6 trillion.

The guy is a complete tool.

 

Our very own Ricter says the same thing.

 

The focus should be on jobs.

 

Obama apparently never go that memo.

His ONLY focus from day one has been re-election.

 

Jobs arent going to come until the government lets asset prices deflate, and banks feel it is in their best interest to lend again, we have lived for 40 years on credit, and the credit aint coming back until our asset prices better reflect the gloabal economy.

Either that or we can try to shut out the rest of the world, and do everything in the U.S. Bottom line is that as long as people can do the jobs we do here for a dollar a day they arent going to be coming back here.

 

So you're saying asset prices are not deflating and that banks are not lending, right now, as in today?

 

Not very original Ricter. (Although it is true. And for good reason.)