The KrugMan Speaks

Dispatches from Derpistan.

Paul Krugman, NYT:

Josh Barro has made a very useful contribution to policy discussion by adapting the term “derp” for a certain kind of all-too-prevalent stance in economic debate, which Noah Smith somewhat euphemistically describes as “the constant, repetitive reiteration of strong priors”. In other words, people who take a position and refuse to alter that position no matter how strongly the evidence refutes it, who continue to insist that they have The Truth despite being wrong again and again.

Nobody can get off into the weeds like a Nobelist, but Krugman works hard to make it understandable for me, and the parts of what he says that I can understand are almost always pretty great.

The Krugman's Graphs

A recession happens when Demand is low.  Krugman's been shouting in the wilderness for a long time that while the Deficit and the Debt are important - and will get to be moreso in time - we have to focus on continuing to boost Demand if we expect ever to get a chance to tackle any other problems.  

And BTW: the deficit is down significantly.  

And BTW also too: if you fix the Demand problem, then the Deficit problem kinda fixes itself; and once the Deficit problem is fixed, then the Debt problem practically evaporates before your very eyes.