Tuesday, May 19, 2020

Should we reopen the economy?

Sure, a little as we are willing to risk it. I would still be against mass gatherings.

Krugman thinsk an opening could lead to a drepression, but it is too late to worry that problem.  Krugman wants to avoid is deflation as he thinks this leads to depression. He is under the illusion that government spending can lead to inflation, a delusion we have deal with before.  If Krugman wants inflation he will need a partial default by the federales.

That is different from reopening.  The case that partial reopening is OK comes from continuing evidence about how to respond to the infection outbreaks. We are getting close to that solution. A partial default is in the works in any event and should be completely orthogonal to the pandemic. We are getting better at that too.

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