Tuesday, July 10, 2012

Interesting post from Dr. Krugman.  Please go to his blog to read more  --  follow link
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Sixties Madness

Robert Samuelson has a very peculiar column in which he alleges that we can’t have Keynesian policies because irresponsible Keynesians ended budget responsibility back in the 1960s. Really.
Look, I know that conservatives are still fuming over sex, drugs, rock and roll, and all that; hatred of hippies remains a powerful force in America around 35 years after the last hippie sighting. But look; here’s the history of the ratio of US federal debt to GDP:
OK, something did happen to fiscal responsibility; but it happened circa 1981, not circa 1961. Who was the president then? I’m thinking, I’m thinking.
I’d add that the recent rise in debt/GDP is very different from what happened in the 80s; this time around we really had a crisis that required fiscal support for the economy. What happened in the 80s had no such justification.

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