

Paul Krugman: Mysteries of Deflation - hendzen
http://krugman.blogs.nytimes.com/2010/07/26/mysteries-of-deflation-wonkish

======
narrator
"Actual inflation = A + B * (output gap) + Expected inflation"

Typical economic equation with a whole bunch of poorly defined fudge variables
that can fit absolutely any data set and is completely lacking in
falsifiability.

"But here’s the thing: the inflation-adjusted Phillips curve predicts not just
deflation, but accelerating deflation in the face of a really prolonged
economic slump."

Ah.. But what causes a prolonged economic slump? Deflation.. and what causes
an end to the economic slump, inflation. So what causes inflation and
deflation? Consumer Psychology? Animal Spirits? High Interest Rates? Low
Interest Rates? Equations where you can plug in the right numbers and get the
results that match the historical data set?

Ok Krugman, stop pussy footing around. You want us to blow out the deficit
just like Japan did and have the government spend trillions on infrastructure
and the fed to keep interest rates at zero forever.

What this will do is make sure that the economy stays in deflation until the
entire generation that is mired in debt up to their eyeballs and lives
paycheck to paycheck goes broke, or in the case of student loans, dies. See
you on the other side of the Kondratieff wave in about 20 years pal. I know
you'll take all the credit for it.

------
1010011010
Krugman always argues in favor of more inflation. He has even said explicity
that the government can create wealth by printing money, which is simple
fantasy. Printing money - causing inflation - only steals wealth from people
who already have dollars.

