Friday, July 15, 2011

Krugman Is Still At It

Paul Krugman just drives me nuts with this sort of stuff. He still wants us to inflate our way out of debt. “[A] modest rise in inflation would, of course, actually be a good thing, because it would help resolve our debt overhang.”

It would be a good thing if you are in debt, yes. It’s a bad thing if you have savings, because it makes those savings less valuable. It’s a bad thing if you have to buy things, because it makes those things more expensive. Inflation, whether modest or not, rewards borrowing and being in debt and punishes keeping savings and thrifty living. It rewards bad behavior and punishes good behavior. It rewards the rich and punishes the poor.

You know what else will “reduce our debt overhang” Paul? Spend less.

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