I can't wait to come back and cite this article when Japan blows sky high.

That article is pure Krugman gold! You just can't counterfeit nonsense like that!

Nowhere in the article did he say that 500% debt-to-GDP wasn't a problem.

More on Burden of Debt by Paul Krugman December 28, 2011

*** Executive Summary ***

Debt does not hurt anyone, thus printing and debt is good.

*** Footnotes ***

For his example say it is the USA, we have a $15 trillion in debt and a $15 trillion gdp. So you print up $75 trillion in debt, 5X, and give it to everyone equally. Suppose the interest on this debt is 5%, thus the American people get $3.75 trillion in interest payments every year.

Mr. Krugman does not see this as theft.

You go into a bank shoot the teller and steal $1 million in cash. You take that money and buy $1 million in bonds. The government seeing the loss gives the bank $1 million in cash to make up for the loss.

It does not make the country poorer, it makes the workers of the nation that used dollars to retain wealth poorer.

Private debt, as in shadow banks does not hurt anyone. They loan out money and if the deadbeat fails to pay it back, the investors of the shadow bank lose out. We need to end banking as we know them today and go with full reserve banking when the average Joe puts his hard earned work hours into the bank. Then end all the government - banking lending ties.

STEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEELH OUSE!

Iceland Banks

They were private Iceland banks. They were not Iceland banks. Yes, they should fail, and hopefully they were full reserve banks so the government could just take the money on reserve at their Fed and give it to the people of Iceland. Hopefully the accounts had FDIC insurance with full reserve checking accounts so the workers did not lose their money.

"Icelandic banks owed more than six times of the country's GDP in debt, and when the world's credit markets dried up, they could not pay their loans back."
If they are a bank, why are they getting loans? Banks give loans, and when the deadbeat fails to make payments they get the home back?

epic drunk posts

If you had actually read the post he was elaborating on, maybe you wouldn't completely miss the point.

^You underestimate Steel's ability to miss the point.

Pretty much EOD right there. Enjoyable watching the neolibs twist their knickers though.

LOL.

You make a solid counter-argument here. I would like to subscribe to your newsletter.

Nobody Understands Debt by Paul Krugman January 1, 2012

*** Executive Summary ***

Nobody understands debt, that is the reason to spend.

*** Reality ***

He gets the title correct. You can read all about it in right-wing textbooks, I prefer "The Creature of Jekyll Island". Barrack Obama, Nancy Pelosi, and Hillary Clinton have all explained to the public if the national debt gets to large our children will have to pay it back, and Krugman acknowledges they are full of it.

The reality is the government creates debt and the banks buy the debt and if the interest rates get too high for the debt, the fed can pump money in to allow the government to get that money at any interest rate the choose. In the 1970s Paul Volcker did not want to destroy the savings accounts of the workers of the country so he allow rates to rise. In return the government gets cash to do with it what they choose, "taxation without representation". Approximately $1.5 trillion this year. Who pays the $1.5 trillion? Anyone that holds M0, M1, M2, or M3. It will never be paid back. If the budgets could be balanced it would freeze the value of the dollar, not to the inverse Euro aka as the dollar index, but to gold.

The debt is not owed to ourselves, it is owed to the holders of M0, M1, M2, and M3. It is the poor Chinese kid that worked making McDonalds toys for $1 per day and the life savings of grandma that was earned at $1 per hour mopping floors. It is the bankers, savers, and planners. It is the $2 trillion in cash of corporate America waiting to be used to build factories and malls.

So what does he want to do with the money? Sounds based on his interviews on youtube give it to teachers. How about this Mr. Krugman, how about put together a b.s. degree in engineering all done through the computer and video with the best instructors of the country. Even the tests done automatically. Then we could do this for all degrees and shut down all the state colleges and financial aide.

http://www.nytimes.com/2012/03/09/op...h.html?_r=1&hp

Pretty impressive for a freaking economist to write a column that is in part about the skyrocketing cost of higher education without mentioning that the government guarantees student loans for basically anyone.

Is there anything in this world that is not the government's fault? Bastards seem to spend day and night plotting to find new ways to be responsible for every last human failing.

?????

How is running up a 100k plus debt you can't escape good for your life? Ivy League educations are over 200k for just your undergrad. Your missing the point. Universities were founded to benefit society, not bankrupt everyone not headed to Wall St or living off a trust fund. Humility and service used to mean something.

???

What?

That's quite the stretch to try linking availability of student aid with debt forgiveness.

Oh no Romney said spend your money wisely and don't expect free ponies. What a bastard.

I doubt Romney can begin to understand how a poor or middle class kid sizes up the gamble of borrowing six figures for a real degree.

I am guessing you didn't have that worry given your use of a "real degree."

Yeah, at 18 a kid with no family knowledge of education and improvement can make a decision likely to cost more than his parents home that can wreck his finances, forever. Think about how wretched the advice available to student borrowers is. Even ignoring the for-profit scams like Phoenix, most tuition assistance programs exist to get you to borrow. And, good high school counsellors are rare where they are most needed.

Your student borrowing, coming from an unprivileged background, is the most fortunate or ruinous decision you can make. A fair shot with good advice, good options, and an escape hatch aren't asking a lot.

I agree that it is an important decision and there are a lot of bad options. I was wrongly assuming that you were building off of my perception of Krugman's argument that public colleges were not good enough and you can only get a decent education at private schools. I think it is an elitist and kinda douchey argument.

I got a great education at a very good price. My parents spent roughly 40k in the late 90s. Instate tuition here was cheap and education inflation means the same education I got for undergrad would be near double. If you are in an expensive state, undergrad is going to hit the stafford cap, so forget the lucrative masters or five year programs.

Yeah, I doubt I would have become a gambling vagabond with debt hanging over me. It doesn't mean it's fair to cripple people's lives forever by just trying for an education.

The whole point of the article is that government support, at federal and state levels, of the public universities has fallen. Budgets are being slashed and fees increased. The only quality, cheaper alternative is "state college". But, it is out of reach of ever wider swathes of high school graduates without 100k of borrowing. And, it teaches at ever lower quality. Florida, Michigan, Virginia, Wisconsin, north Carolina, SUNY, and the Cali system all can offer IVY quality educations, but aren't the bargains they were 15 years ago. Affordable education that led to a better life made postwar America, but it no longer exists. That's unconservative and his point.