...inflation is an important tool in getting us out of this mess. It's painful and unfair--those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford. But it's what the Fed is (quietly) aiming for.The accompanying video further enhances the madness that we are seeing. Listen to what these people are claiming -- that the raising of interest rates by the Federal Reserve in 1937 was a huge error -- and realize that they are giving a truncated and perverse history of what happened in the 1930s.
What is especially chilling is the cavalier way that they dismiss savers and people on fixed incomes. Since Krugman already has declared savers to be partly responsible for our economic mess, my sense is that we are going to see responsible people demonized even more.
No society ever in human history has managed to inflate its way out of an economic crisis. People forget the crises that occurred in the 1970s precisely because the government had resorted to the printing press. It looks as though we are going to head for another repeat of that sorry decades, except what is going to happen is going to be much worse than what was going on nearly 40 years ago.
Thanks, Krugman. You receive a Nobel Prize and use it to promote the worst of "crankdom."
(Hat tip to Mark Hovila)