In case folks didn't actually read this Henry Blodget piece:
"Few economists have been more correct about the economic crisis of the last several years than the proudly liberal Paul Krugman.
Krugman spotted the "liquidity trap" early on (since the problem with the economy was too much debt, cutting rates and creating easier money would not get us out of it).
Krugman shot down the hyperventilation about a coming hyper-inflation, arguing that the global labor glut would prevent easy credit from inflating wages.
Krugman quickly pronounced the Obama Administration's stimulus as far too small and said it would not get the job done.
Krugman scoffed at the idea that interest rates were about to skyrocket as our creditors decided en masse that we were so fiscally irresponsible that they couldn't possibly lend us any more money.
Krugman has been wrong about some things, but he has been right on all those counts.
Recently, Krugman has denounced the "austerity" push of the GOP, arguing that tackling our debt and deficit problem right now with spending cuts is the worst move we can make. Such cuts, Krugman argues, will put more people out of work and shrink the economy. And this, in turn, will increase, not decrease, the deficit.
Krugman thinks we should tackle the debt and deficit problem later, when the economy is on more solid footing. He points to record-low interest rates as a sign that the world is still willing to lend us as much money as we want, practically for nothing. And he argues that, instead of cutting back, we should be using that money to build infrastructure, strengthen the economy, and put more Americans back to work."
Read more: http://www.businessinsider.com/david-frum-paul-krugman-right-2011-10#ixzz1boQOsdG3
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