Modifying Krugman

McClatchy journalists have done a nice job of modifying Krugman's severe warning article from Monday. Recall that Krugman is describing the period that we are entering as the Third Depression. Krugman was incensed by the G20 meeting and the overall adoption of a policy to reign in deficits. Krugman likened it to a severe orthodoxy that places millions of people's lives, those without jobs or prospects of jobs, into the dustbin of belt tightening and oh well life is tough repressed thinking. Krugman wants more spending and enlarging economies not belt tightening.

Here we have some expanded views and reactions to Krugman.

This is something to watch. We want to keep our ears to the ground especially about the direction of the economy.

McClatchy: Does world agreement to halve deficits fix things or worsen them?

Prodded by European leaders frightened by a debt crisis in Greece, the leaders of the world's top economies met through the weekend in Canada and promised to cut deficits in half by 2013 and stabilize their debt by 2016.


Deflation is the decline in prices across the economy. It's pernicious because it leads consumers and businesses to withhold spending amid expectations that prices will decline further. Japan suffered through this in the 1990s, and the trend is arguably visible in parts of the U.S. housing market.


Nariman Behravesh, the chief economist for forecaster IHS Global Insight, thinks Krugman has overstated the depression threat.


"He (Krugman)was always a little prone to drama, but the basic point he's making is that this is not the time for countries that don't need to tighten to tighten," he said.