President of Estonia Calls Krugman Smug, overbearing, Patronizing.

My wife and I were in Greece and Spain last summer. The misery they're suffering is hard to comprehend from here in the US. Not quite as bad in Spain, but still a lot of suffering. Both countries have 20+% unemployment and, worst of all, their economies are contracting at 6% per year.

The euro is an economic prison for Greece, Spain, Portugal, and to some degree, Italy. There's no amount of stimulus that gets their economies growing and gets unemployment down to acceptable numbers. Returning to their own currencies and a 30-50% devaluation is the only solution.

 

The ruling elite will not let these countries left eurozone.
I guarantee you.
Not in million years.
That would mean their New World Order plan could go to hell

 

no not all.

I am saying that it took a year or two for the economy to recovery after Reagan and Volker made adjustments. Volker cracked inflation with tightening, then Reagan jump started the economy with tax cuts.

 

So a year or two after that (wasn't that long, actually), when Reagan began a series of tax increases, unemployment began to rise?

 

we did this before... even with the tax increases... there were still net tax cuts.

 

Yeah, but the economy did not have the benefit of that hindsight. At the time, in spite of Reagan repeatedly raising taxes, employment conditions continued to improve.

 

that makes no sense to me.

if you go from a 70 percent top bracket to 25 and then you nudge it back to 28 or even 35 you would still feel a relative tax cut to the initial rate.

 

Doesn't to me either, unless... spending didn't fall. Aha! Reagan, that old Keynesian.

Edit: What a coincidence!

"One comparison I find instructive is between Obama and Reagan at this point in their presidencies, in each case compared with four years previous — which in each case roughly corresponds to the beginning of each era’s economic crisis (the double-dip recession that began in early 1980, the financial crisis that began in 2007 but really got serious in early 2008). Here’s what it looks like:

<img src="http://graphics8.nytimes.com/images/2012/06/07/opinion/060712krugman5/060712krugman5-blog480.jpg">

"Much more government spending under Reagan. Some of it was Reagan’s weaponized Keynesianism, some of it state and local — sustained in part by revenue-sharing that no longer exists, but also by a much greater willingness at the time to raise taxes on a temporary basis."

http://krugman.blogs.nytimes.com/2012/06/07/real-government-spending-per-capita/

 

Don't worry you're not alone.

 

They play checkers. You play chess.