Could G20's bitter medicine turn recession into a long-protracted depression?

And then there's this:




The usual bs - whack the little people, leave the big boys alone.

I would mention that, while Nobel Laureates like Krugman are well respected, other Nobel Laureates such as Buchanan and Prescott do butt heads with portions of what he is saying, no doubt along the lines of the recent Keynesian resurgence which is being experienced.

Since these actions being considered by our world leaders do follow lines with theories contradictory to many aspects common in Keynesian theory, it is no surprise that Krugman would be against them, but I have no desire nor the expertise to place myself in either camp and argue in their name. I do wonder at how this will be managed and the strains it will produce, and am concerned as to the ramifications of such.

If they're cutting spending to fix the deficit rather then spiking taxes they should do fine.

The whole contention here is exactly along the lines you just said, Dragom -- do we keep stimulus spending going or begin austerity measures to cut down the deficit. If we keep taxes low, then it's part of the "stimulus spending," but if we raise them, then it's part of the "austerity measures."

So the tax is more or less going to end up following one of these two measures, and which way we end up going is in dispute.