Why has Trump apparently blown up the economic relief deal? I don't care, and neither should anyone else. In 24 days we can stop worrying about this terrible person's motives, and focus on the GOP backed him all the way. But there are more interesting questions
Says Paul Krugman on his twitter.
Leave the defense department shut until the inauguration, fine with me. Accept multipliers are below one, fine with me. Put Congress on leave, fine with me. Let the governors stew and possible get clues, fine with me.
I can add some stuff? Dig up McCain's corpse and burn it. Declare Tom Cotton a permanent retard. Shut down Bernie and the Godotists. We should track down Devin Nunnes cardboard cows and take them away. And during this period we can contemplate the New Fed contract.
Larry appears to be worried that across-the-board checks will overheat the economy, leading to inflation. Again, I agree that the economy is likely to recover fast once there's a vaccine, so that demand-side stimulus won't be crucial. But inflationary pressure? Not a worry
Righto. as long as we continue to support regressive Fed taxes and subsidies to the wealthy then we will not have inflation. The real fear is deflation leading to an overnight Nixon Shock, and that would put most central bankers into a state of psychosis. Do we really want jay Powell running through the streets blithering?
Then he contradicts himself
In a secstag economy you actually want the government pushing up demand with deficit spending, even when there isn't a crisis. Better if that spending takes the form of public investment, but as with extended UI, that's not on the table right now
You just discovered that government multipliers are less than one. You have also discovered Jay Powell's regressive VAT tax. You have always known that deficits pump up the super wealthy. Making the rich richer has always been part of the Keynesian plan.
I think Paul is going through a moment of confusion.
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