http://krugman.blogs.nytimes.com/...f-macroeconomics-wonkish/


http://krugman.blogs.nytimes.com/...12/ryans-five-point-plan/
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I need to read this but am too tired now. Noting for later!

"Now, you don’t have to accept this model as a picture of how the world works. But you do have to accept that it shows the fallacy of arguing that the savings-investment identity proves anything about the effectiveness of fiscal policy.

So how is it possible that distinguished professors believe otherwise?

The answer, I think, is that we’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed.

And that’s what seems to have happened to macroeconomics in much of the economics profession. The knowledge that S=I doesn’t imply the Treasury view — the general understanding that macroeconomics is more than supply and demand plus the quantity equation — somehow got lost in much of the profession. I’m tempted to go on and say something about being overrun by barbarians in the grip of an obscurantist faith, but I guess I won’t. Oh wait, I guess I just did."

Excellent article and a very quick read. On to the next one. Thanks martian!

voodoo economics is where the poor people borrow money from the people who already made a surplus of it, then use some kinda pin cushion type dealy-bob facsimile to get the person that they owe money to, to drop dead so they don't have to pay anything back.

Yes, poor people force rich people to loan them money that they can repay interest on and then they make the rich people die.

by force, do you mean high crime rates? kidnapping? bank robbery? muggings? burglaries? um, what else do poor people do when they feel the need?

a board with a nail.

Krugman is frustrating to read as he will chastize others for being singular-minded in representing individual opinions and then do the same thing himself.

In the first example, he's assuming the capital supply is unlimited and that the government can't crowd out private capital investing, but we know capital markets aren't unbounded. Of course the can crowd out.