Quote of the Day | 1121

In the current policy debate, debt is often invoked as a reason to dismiss calls for expansionary fiscal policy as a response to unemployment; you can’t solve a problem created by debt by running up even more debt, say the critics. Households borrowed too much, say many people; now you want the government to borrow even more?

What’s wrong with that argument? It assumes, implicitly, that debt is debt – that it doesn’t matter who owes the money. Yet that can’t be right;

Paul Krugman, ‘Debt, deleveraging, and the liquidity trap’

Boeklog on Krugman

[x]#7987 fan zondag 21 november 2010 @ 17:22:47