Paul Krugman does not simply advocate inflation; no, he worships at its very shrine. Inflation is our savior; inflation will give the economy "traction."
Furthermore, anyone who might have an argument against his illogic is doing nothing short of advocating a return to "the Dark Ages" of economics. I say, nonsense.
One of the mantras of modern Progressives is that contemporary thought always is superior to any thinking that occurred in the past (especially if that thought is espoused by Progressives). Thus, the way to "win an argument" is simply to quote whatever was written or said a while ago and to assume it has to be wrong. (The exception, of course, is anything written by J.M. Keynes, who is treated as The Great Prophet.)
So it is in the Krugman blog post I have linked in which he quotes a passage from Joseph Schumpeter's work and then assumes that because Schumpeter wrote it in the past, that it amounts to advice from "the Dark Ages." Why? Well, because Krugman says so.
However, Schumpeter in that passage is addressing the point that inflation distorts the structure of production, creating malinvestments and bringing about maladjustments which cannot be sustained over time. So, using inflation to fight any depression simply prolongs the pain, and any short-term "gains" are wiped out longer term.
Obviously, since Krugman's mantra is "we need inflation," such words from Schumpeter are heresy. Furthermore, because Schumpeter wrote them many years ago, they automatically are wrong.
But I also have another problem. Krugman has been insisting that the reason the economy is in a funk is because the Obama administration pushed through an $800 billion "stimulus" instead of a $1.2 trillion spending package. Yes, for lack of $400 billion to be spent on political pet projects, the entire economy is sinking.
Krugman also insists that inflation will give the economy "traction," as though an economy is a perpetual motion machine that just needs a push from monetary authorities to move on its own. Where does he get that? Furthermore, the only way for his plan to work is for all assets to be homogeneous and for factors of production to automatically be able to adjust when done so administratively.
Does he know nothing about what happened with such economic planning in the former U.S.S.R.? There were economic planners who were as intelligent as Paul Krugman and who had doctoral degrees from Moscow State University, where the economics curriculum was every bit as rigorous as that of MIT.
Yet, the economy was a miserable failure, as planners could not negotiate simple goods through simple processes. Why? The economy lacked real prices that reflected the relative scarcity of factors of production. Instead, they believed that administered prices and production functions would take care of things, which never happened.
So, Paul Krugman demands the same for us. Have inflation distort prices, assume that factors of production are homogeneous, ratchet up government spending, and it will give us prosperity. Hey! It worked well for the U.S.S.R.
Talk about the Dark Ages.