Paul Krugman Debt Is Good Analysis

The year is 2009 and the economy has just taken a massive downturn; you as the president have two options, stimulate growth by helping the poor or by helping the rich. These two concepts are in direct opposition. Conservatives believe that the economy will recover by stimulating the rich (supply-side economics). Conversely, liberals largely believe stimulating the poor (Keynesian economics) is the best solution. Paul Krugman is an avid follower of the latter. In “Debt is Good” by Paul Krugman, the author believes, contrary to popular belief, that debt is generally a good thing. Borrowing money in a time of economic downturn is the best time to borrow money. This is because “the federal government can borrow at historically low interest rates” (Krugman, 2015). The debt that is procured can then be used for public works projects that will help the general population by providing jobs. Furthermore, Krugman explains that the lower interest rates is a good indication of what the market is in need of (Krugman, 2015). It is clear then that it becomes the government’s responsibility to take on debt. This is because many economists believe that “the debt of stable, reliable governments provide “safe assets” that help investors manage risks…” (Krugman, 2015). People trust the government to pay off its debts so they assume that investing in the government is always a safe bet. This makes people willing to give the government money, which allows the government to stimulate job growth, in turn, helping the people. The government stimulating the economy by taking on debt is a liberal idea that many conservatives enjoy bashing. One such conservative that enjoys attacking liberals is John Boehner. Boehner was elected speaker of the House in 2010 and remained in that position until 2015 (Krugman, 2015). In “The Blackmail Caucus, a.k.a. the Republican Party,” Krugman shows strong distaste for Boehner calling him “a terrible, very bad, no good speaker of the House” (Krugman, 2015). Krugman’s dislike for Boehner stems for Boehner’s blatant attempts to undermine President Obama’s presidency. Krugman explains we are in “an era of budget blackmail” where republicans are allowed to use the budget to get what they want (Krugman, 2015). The author finds this disturbing and fears it will only worsen with time. Krugman find himself with much discontent for conservatives who choose to follow this policy; however, Krugman does not disagree …show more content…
Krugman general finds himself at odds with most conservative politicians on economic policy. This is because most conservatives take money from donors to fund their campaign. In “Trump Is Right on Economics,” Krugman goes as far to say “nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine” (Krugman, 2015). This is a true insult because it suggests that all conservatives are mindless sheep who follow whatever the money says to follow. Krugman, however, credits Donald trump for being self-financing and not following the failing conservative economic approach. In that same article Krugman proceeds to attack the naysayers of the liberal approach to economics. Krugman states the unemployment rate had went from “7.8 percent when Mr. Obama took office… to 5.1 percent” in September of 2015 (Krugman, 2015). This information suggest that Krugman agrees with the job that the president has been doing in relation to the economy, moreover, suggests Krugman is a