Wednesday, April 18, 2012

Paul Krugman: Liberal Hero?

Paul Krugman is the hero of the progressive movement, advocate of liberal spending, preservationist of the middle class, etc. He also wants the Fed to go for an inflation rate of 4-5% because that “lowers the effective debt” and reduces the cost that the nation will have to pay for all of the borrowing that it has been doing. Nice theory.

What inflation does is reward debt, Krugman’s plan, and punish savings, which Krugman carefully omits mentioning in his plan. Here are the ones who benefit from inflation:
legislators and politicians who ran up the national debt
Wall Street bankers and financial institutions
stockbrokers and major stock market investors

Here are the people who are punished by inflation, even minor inflation:
anyone who works for wages
people on fixed income, such as Social Security
anyone saving money for retirement

So, let’s see now; tell me again how, with his calls for 4-5% inflation, Paul Krugman should be considered as a hero for the middle class and the “little guy,” because I’m not seeing it.

2 comments:

bruce said...

but he has one of those Swedish medal thingies, so that makes him a hero. Oh wait, Obama has one too. Hmmm... which one, which one... my head is aching. Never mind my sides from laughing.

Diana said...

Needs more research about him.

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