Krugman's other "solution" is to confiscate more wealth from businesses and individuals and then pretend that the transfer itself makes everyone wealthier. The interesting thing to me is that this process -- debasing money -- actually makes people poorer as their money buys less than before.
However, when we are in Keynesianland, none of this matters. Inflation increases and it puts more money into the hands of people who then spend it, and somehow this magically lifts an economy from depression. As Krugman recently wrote:
Actually, there’s a very good case for allowing inflation to rise above 3 percent, to 4 or even 6 percent, for several years. Don’t take it from me — take it from Greg Mankiw and Ken Rogoff. Indeed, it’s arguable that inflation, both actual and expected, is the main thing the Fed should deliver, if it can.Of course, the idea that the Fed has the ability to "manage" inflation is something for the debate mill. My belief is that it does not take long for inflation to jump from six percent to double-digits and beyond.
Underlying this nonsense is the belief that money itself is wealth, and that the government creates it out of thin air. Thus, the government pulls yet another financial rabbit out of the hat. Through central bank manipulation, the government can borrow at a zero (or even negative, in real terms) interest rate, which then becomes "proof" of "free money." In other words, the government can spend money as though the economy were robust instead of being just bust.
In the end, the results are yet another Keynesian mirage. Spend as though you were rich, as though the spending itself will turn around the economy and really make us rich. Maybe in the fantasyland of the Progressives, but not in the real world.
And, as the economy continues to tank, Krugman can blame the Wall Street Journal editorial writers, the Tea Party, and everyone else, but never his own ideas that put this spending spree into motion. No, if the economy tanks, it must be because those in power didn't spend enough and debase the currency enough because, after all, Paul Krugman never is wrong.