Monday, August 18, 2014
The Forever Slump
http://www.nytimes.com/2014/08/15/opinion/paul-krugman-the-forever-slump.html?_r=0. DUE 1 September 2014. Who are the "too-muchers"?? Who are the "not-enoughers"? Why are we in a slump that we can't seem to get out of??? What is the lesson we should learn from Europe??
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Krugman describes the too-muchers as people who have warned incessantly that the things governments and central banks are doing to limit the depth of the slump are setting the stage for something even worse.
ReplyDeleteThe not-enoughers have warned that inadequate fiscal stimulus and a premature turn to austerity could lead to a lost decade or more of economic depression, that the Fed should be doing even more to boost the economy, that deflation, not inflation, was the great risk facing the Western world.
The European Central Bank, or E.C.B., not only failed to match the Fed’s asset purchases, it actually raised interest rates back in 2011 to head off the imaginary risk of inflation.
The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.
Krugman states that the too-muchers are currently setting the Forever Slump into a more difficult and worse situation in the upcoming future; stating that we that the Greek-style crisis any day now. The too-muchers see the risk that America could be at risk of inflation.
ReplyDeleteThe not-enoughers are people who would not be paid less than what they work for. They see that if the government takes a "premature" turn to austerity and that inadequate fiscal stimulus would eventually lead us into a economic depression. Unlike the too-muchers, the not-enoughers are afraid that deflation would become a risk to the Western World.
Unlike Europe, America has not eagerly embrace the now-discredited doctrines, which has justified fiscal austerity even in the depressed economies. The Fed chairwoman, Janet Yellen, says that we would take the risk of a temporary inflation rather than ending and pulling the brakes all at once. We should learn from Europe that we could make our banks and government do their actual jobs that we could improve our economy and possibly prevent future economic difficulties.
In a simplified version, the too-muchers are the people that believe that the government is doing too much with the economy and they are just interferring with it and the not-enoughers are the people that think that the government is not doing enough to help with the economy. The too-muchers believe that what the government is doing now, trying to control all of the economy, is just making things worse. It is just going to keep getting worse if the government keep doing this. The not-enoughers believe that the government needs to do more to help and control the economy. They think that since the government isn't helping, it will lead to a "lost decade."
ReplyDeleteKrugman identifies the problem as a battle between the too-muchers and not-enoughers. The people in America cannot agree on what to do so we will never get better. If the government listens to the not-enoughers, then when they do something, the too-muchers will get upset. The lesson that we should learn from Europe is to control the inflation rate and growth rate. We need to make sure that we do not go into a recession like they did.
There is one thing that I didn't understand and if someone else did, I would be grateful if they could explain it to me. In the fourth to last paregraph, Krugman states that the inflation has fallen below 2 percent. Isn't that good because I thought that inflation is bad? Why is having a low inflation rate bad?
By the way, this is Seth Adler.
DeleteThe "too-muchers" are generally defined as conservative Republicans. These people believe that we should be cautious in government buy back of debt and that we need to be careful when artificially lowering interest rates. The "too-muchers" are generally defined as liberal democrats. Liberals think that the government has not racked up enough debt. They think the deficit is too small and that the way to economic prosperity is to borrow more and more. Liberals are proponents of artificiallty low interest rates, government bailouts, and stimulus bills issued by the government.
ReplyDeleteI don't think anyone knows for sure exactly why we are in this economic slump. If anyone did know the exact reason the problem would have beem solved a long time ago. Even though thew unemployment rate has been falling in recent years it is still not at pre-crisis levels and I don't think this will happen anytime soon.
Even though I'm hesitant to describe myself as a republican I believe in a lot of fiscally conservative viewpoints. My theory for the still slow economic conditions is based on too much government intervention. I suppose I would classify myself as a "too-mucher".
I think it is too early to decide whether Europe or the United States made better decisions during the financial crisis. even though I am not as educated on this topic as I should be I still believe that there were probably major differences between the European economic crises and the American crisis. It's nonsensical for me to believe that since Americans appear to be recovering right now, while the Europeans are suffering, this is entirely because of monetary reform and government policies. It would be more prudent to judge the actions between the Federal Reserve and the ECB during the financial crises in at least 5-10 years.
Oops I meant not enoughers when I was talking about the liberals in the 1st paragraph.
DeleteKrugman describes the too-muchers as those who believe that the government is doing too much to stop the “economic slump,” while the not-enoughers believe the government has to do more in order to counter this slump, even if that means an increase of inflation rates. Krugman sides with the not-enoughers, going against the Japanification and austereness that worsens depressions.
ReplyDeleteOur current slump stems from the fall of the Lehman Brothers; and, while this shouldn’t be a problem when it comes to recovery, it has been drawn out by poor policy decision, such as deficit spending (the opinion of the too-muchers) and “inadequate fiscal spending” (the opinion of the not-enoughers).
From Europe, we should learn the consequence of its too-mucher mentality. Justification of economic austerity has only led to unmovable unemployment rates and stagnation. And while America is still out of harm’s way (when it comes to unemployment), we should not be hesitant of an inflation rate increase – it would be better in the long run.
Krugman describes the "too-muchers" as those who think the government is doing things that could only harm the economy in the long run, such as deficit spending. They believe that doing this could cause an economic crisis seen in Greece only a few years ago.
ReplyDeleteThe "not-enoughers" are those that feel that the government is not doing enough to prevent deflation. They believe that the true danger is the US falling into a "Japan-type quasi-permanent slump".
We are in a slump that we cannot get out of because the two sides, the "two-muchers" and the "not-enoughers", cannot come to a consensus on what the biggest risk to the economy is. The two sides have been in this debate for over 5 years, and each side is holding steadfast in their arguments.
The lesson we can take away from Europe is that we should opt for temporary inflation rather than raising interest rates in order to combat a supposed risk of inflation.
The "too-muchers" are people who believe that what the Government is doing to the limit the depth of the slump are going to make things worse. They believe deficit spending could cause a Greek-style crisis.
ReplyDeleteThe "not-enoughers" argue that the problem is Japanification and inadequate fiscal stimulus will lead to an economic depression.
We cant seem to get out of this slump that we are in because inflation remains low and the interest rates. The also exist the risks of a Japan-type quasi-permanent slump.
The lesson we should learn from Europe is rather than lowering the inflation rate soon it would be better to temporarily raise the inflation rate. A few bad shocks and/or policy missteps could send us down the same path
In an attempt to avoid confusion, Krugman uses the terms "too-muchers and "not-enoughers" as a simplification of the two sides of the issue of preventing the economic slump from getting worse. The "too-muchers" are those who think the government and central banks are interfering too much, which could lead to a greek-style economic crisis. The "not-enoughers" are those who think the government and central banks involvement needs to be increased in order to prevent entire decades of economic depression. The "too-muchers" are trying to prevent excessive inflation while the "not-enoughers" fear deflation.
ReplyDeleteWe are currently in a "forever slump" because the economic recovery could be halted permanently by a single policy mistake. In the past six years, we have not made a full recovery and that one mistake could set us back even more. Pressures from both sides of the "too-muchers" and the "not-enoughers" have put policy makers in a tough position where they must make decisions that could improve or ruin the recovery.
The lesson that we should learn from Europe is that if the government or central banks stops assisting the recovery too early, we could return to where we were 6 years ago, or even worse. It would be better to risk temporary penalties in order to prevent a long term or even "forever" slump.
Krugman's opens up his article by making sure we are primed into seeing two different sides , one seen as bad and another as good. He calls these two groups the "too-muchers" and "not-enoughers" which from the start makes me inclined to believe that anything the "too-muchers" say is wrong. I also have a problem with how he defines these to groups he puts himself into the "not-enoughers" and I wonder what does he not have enough of?
ReplyDeleteEven more so I feel as though the author is given to much power by getting to define who gets to fall into which group. On to the actual argument he claims we should be a lot more scared of deflation. When we look to China their currency is probably one of the lowest ever seen and they are seeing a rapid growth in terms of their economy. When we look to other societies who see high levels of inflation they generally don't end up well.
Neither the "not-enoughers" nor the "too-muchers" know how to deal with the problem even though they might be able to identify it. Also I don't feel like the author can really measure the influence that the "too-muchers" have in Europe nor can he say this influence is the cause of the problems they are having.
Krugman states that the US economy is from a state of recovery and one wrong move would drop the economy into a deep depression. Krugman talks about two specific groups who have been debating about US government economic policies. Starting off with the too-muchers who are a group of people that think the US government has been working too much with the US economy and if they continue it will eventually hinder the US economy. The next group, the not-enoughers are a group of people who think the US government needs to have an more active role with the economy and stop deflation.
ReplyDeleteThe U.S. is considered to be in a stump because of the conflicting ideas between the too-muchers and not-enoughers. The too-muchers insist that the U.S. government is doing deficit spending while the not-enoughers insist the U.S. government needs to support inflation and government spending.
The lesson we should learn from Europe is that the government should continue on helping economic recovery rather than stopping short. Instead, we should support raising inflation rates in order to help the economy recover bit by bit.
The "too-muchers" are those who believe that the government and the central bank are intervening too much in order to fix the economic crisis. The "too-muchers" are warning that the government's actions could cause an even worse situation as a result of their attempts to lessen the current slump. The "not-enoughers" are those who believe the government needs to intervene more than it has already done, they see deflation as a bigger problem than inflation.
ReplyDeleteWe are in a slump that we can't seem to get out of because we have been stalled, unable to recover due to disagreement over the solution. The "too-muchers" and "not-enoughers" both believe in their own solutions and cannot come to a compromise which leaves us seemingly stuck in this slump.
The lesson we should learn from Europe is that we should accept temporary inflation in order to avoid the so-called "forever slump". Another lesson from Europe is that the government and central banks should ensure that we have exited the slump before they cease their assistance.
The U.S. is on a path of economic recovery at the moment, where one huge mistake could take us off of this course that we are on. So here raises the debate into which actions are necessary to make moving forward. With this, we have two opposing viewpoints as far as what actions to make. The too-muchers are people who believe that the government is doing too much to help the economic slump that we seem to be in at the moment. The not-enoughers, as Krugman defines himself as, believe that the government is not doing enough too help the economic slump that we are experiencing.
ReplyDeleteWe are basically in this slump because of poor decisions made by our government, in efforts to help. Due to disagreements in the government by the too-muchers and the not-enoughers, we continue to experience problems. It is too difficult to make decisions when you have opposing viewpoints, it just won't happen.
What we can learn from Europe is that we should go with the not-enoughers' theory, as the risk factor is not as great as it is with the too-muchers' theory. We would rather risk a temporary inflation, rather that higher unemployment rates and economic stagnation.
The too-muchers of society are, as Krugman illustrates, those who believe that the federal government is doing “too much” when it comes to fiscal policy, fearing inflation. However, the not-enoughers, which Krugman takes as his favorable outlook on how to deal with economic policies in Europe, believe that government should do more to counter stagnation, stimulating growth and raising inflation rates.
ReplyDeleteWe are currently in an “economic slump” because of the stagnation in our government. Our country has a similar parallel to Europe, where we have conservatives (like the too-muchers) and the liberals (like the not-enoughers). With the recession of the Lehman brothers and tension between these political factions, recession has drawn out to the present day.
Krugman emphasizes that from Europe, Americans can see the negative effects of having (a) political factions of too-muchers and not-enoughers making poor fiscal policy decisions or (b) an entirely too-mucher society that seeks to stop deficit spending and ultimately killing the economy. We should instead focus on stimulating the economy, despite the temporary increase in inflation rates.
Krugman uses the terms "not-enoughers" and "two-muchers" to describe the dichotomy between views of the government. The not-enoughers believe that the government needs to be more involved with the economy in order to prevent an even larger economic depression. The two-muchers are those who believe that the government is interfering too much with the economy. They believe that if they continue to govern so strongly, it could lead to a Hellenistic state of depression.
ReplyDeleteKrugman believes that Forever Slump will continue because of the inability of the two sides to come together to reach a consensus about what actions should take place. The decisions that the government would make could either lead to an improvement or a collapse of the recovery efforts.
What we can take away from Europe is that we should temporarily raise the inflation rates rather than lower them. In doing this, we can prevent an even larger rise in the inflation rate.
Krugman explains the too-muchers to be people who believe that the government is doing too much to help the economic slump that we seem to be in at the moment and fear inflation.
ReplyDeleteThe not-enoughers believe that there is not enough being done to help the economic slump that we are experiencing.
We are in a slump that we can't seem to get out of because we have been unable to recover due to disagreement over the solution. The "too-muchers" and "not-enoughers" both believe in their own solutions and cannot come to a compromise. It's difficult for both sides to agree on a way to improve in order to "get out" of this slump.
Europe has the right idea on stimulating the economy and keeping it going, rather than the opposition on spending and debt. We should accept the inflation and risk it, hopefully making it temporary.
The "too muchers" and the "not enoughers" are just simple termonology, used by krugman, to give light to the different political classes. The "too muchers" are used to describe the people who believe that the governments power should be limited despite their belief that their involvement is in fact "helping" the economic slump. The "not enoughers" are the people who are on the opposite spectrum of the "too muchers" belief.
ReplyDeleteWe are still in this slump because the too muchers and the not enoughers cannot come to a general agreement of the matter. One side cannot just get their way where the other side would not feel "ripped off" or "cheated" in any way. Krugman agrees to this claim.
The best solution that Europe actually had adopted, in which we should follow so, would be to raise the inflation rates, more over temporarily, as in the long run, it may help us 10 folds more than hurt us.
The too muchers are people who believe that the government is doing to much to help the economy, and by doing two much they are only applying a short term bandaid that will only make things worse off. the not enoughers on the over hand believe in the opposite. they believe the government should be doing more 2 help us and that we need more organized government. in our lives. we are currently in a slump because poepl have no money and when people not have money they save but saving does not stimulate the economy, spending does! so because people are saving we are all stuck in a deletion until spending starts to go back up! if there is anything to learn from Europe it is that inflation is not always a bad thing and it could be used to our advantage . if people feel like they have money they will spend it, and stimulate the economy!
ReplyDeleteThe "too-muchers" are the people who believe the government's interference into the economy is excessive and will only hinder the economy. They believe that the deficit spending we are doing now will only lead to an event similar to that of which occurred in Greece. On the other side are the "not-enoughers". They are those who believe the government needs to be more involved in the economy in order to avoid a depression. They fear that deflation will cause an economic recession or worse while the "too-muchers" fear that inflation will cause an economic disaster. The "forever slump" that Krugman addresses is the fact that this is a continuous debate that will most likely never be settled. The two sides fight to see who is right which is exacerbating the economic plight our country is facing. If we look at Europe as a warning sign, the lesson that can be drawn from the economic turmoil there is that a stubborn "too-mucher" mentality will ultimately lead to an economic crisis. This is caused by "too-muchers" having a severe aversion to inflation which can actually stimulate and help the economy.
ReplyDelete- Justin Castillo
Economist Paul Krugman iterates the debate
ReplyDeleteThe "Too-muchers" and the "Not enoughers" are two groups proposing solutions aimed at propelling the economy out of the "Forever slump". The "Too-muchers" is a group concerned with the actions of the government and the central banks. They claim deficit spending can only result in a tragic demise, much similar to the crisis in Greece. On the otherhand, the "Not-enoughers" support the statement that withholding spending limits the economic stimulus and can have devastating repercussions which includes deepening the economic hole or extending its current state to a prolonged number of years before a recovery state is established.
DeleteThe "Forever Slump" is the economic stalmate in growth. Constant politcal debate and debate amongst groups like the "Too-muchers" and the "Not-enoughers" accomplish nothing besides holding back economic recovery. Krugman has address the situation as to which fear controls the pawn. In light of fear, the government is reluctant to pass any economic policy because of the fragile state of the economy. It only takes a series of small economic shocks and a baddly placed policy to throw the economy into crisis mode.
What we can learn from Europe is that their is now only one viable solution to solve economy.The "Too-muchers" which influence swept Europe resulted in bleak results. Europe followed the "Too-mucher" metality and decreased spending, and again in light of fear, imposed an increase in interest rates to combat a dreamt falicy of a growing inflation rate which stalled economic growth and led to deflation amongst the debtor nations. The solution lies not in a theoretical economic policy but in a realistic economic model in which the all futuristic possiblities are accounted for before use.
- James Chang
DeleteThe not-enoughers are the people who believe that the government is not doing enough to help the economy. They reason that the government should go into more debt because, in theory, we can keep going in debt until the world ends but it doesn't make it good. They think that spending more money would put more money in circulation getting us out of our recession.
ReplyDeleteThe too-muchers are the people who believe that the government is doing too much to aid the economy and that our deficit spending will throw us into another, maybe even worse, recession.
We are in a slump right now because both sides can not come to an agreement on the issue. And if this stalemate over opinions do not come to an end, the much anticipated end of this recession may not come.
The lesson we can take from Europe would be that the too-muchers will worsen our economic stability, given that they do not fancy inflation.
The “too-muchers” are the ones that have been warning the US non-stop that the things that the government and central banks are doing to try to lessen the effect of the economic slump is only setting up the economy for something much worse later on. The “too-muchers” also suggested that if the government keeps spending more than they have it will in a depression like that of Greece.
ReplyDeleteThe “not-enoughers” have a different argument. They say that if the government provides inadequate fiscal stimulus - does nothing to help increase public spending or decrease taxation, and if the government turns to austerity, policies that reduce budget deficits, too soon it could lead to more economic depression, They believe that the Fed should be doing more to boost the economy.
As for the reason that we can’t seem to get out of the slump is because, as Krugman said, “all it would take is a few bad shocks and/or policy missteps to send us down the same path.” So the Fed has to take thing slow and cautiously so they don’t accidently send us into a depression.
What we can learn from Europe is that we shouldn’t be too hasty when implementing policies or “risk hitting the brakes too soon”. European officials believed what the “too-muchers” had to say, they turned to austerity and raised interest rates in order to stop “the imaginary risk of inflation”. And when all was said and done the “too-muchers” prediction of what was going to happen in the near future didn't come true.
A grand article written by Krugman on the potential "Forever Sump" path that America is walking on. According to Krugman there is a debate between two groups: the "not-enoughers" and the "too-muchers."
ReplyDeleteThe "too-muchers" are basically saying that Americas central bank, the Federal Reserve, is using strategies that will only put America deeper on this road of depression. They argue that deficit spending will end up causing America to attain the same problems as Greece does like paying off interest rates for example.
The "not-enoughers" on the other hand are debating that the government is basically being lackadaisical and not helping increase public spending which leads to deflation. From a consumer standpoint deflation sounds like a great thing to influence people to buy more goods and services with the same value of their currency. But that would just be inconsiderate on me because deflation increases the real value of debt for America.
I think that it is safe to say that America is in the position it is in right now is because of the government spending. For example, military, Medicare and social security. According to CNBC, 23% of the federal budget is from military resources, 20% is from social security and 19% is from Medicare/Medicaid.
How to possibly stop all of this chaos our dear government has caused? Maybe we should stop borrowing money from other countries and on top of that don't pull money out of thin air when you know you don't have access to it. no matter how many loans you get, if you can't produce goods and services that others will buy, you will (still) eventually end up being poor.
"How to possibly stop all of this chaos our dear government has caused? Maybe we should stop borrowing money from other countries and on top of that don't pull money out of thin air when you know you don't have access to it. no matter how many loans you get, if you can't produce goods and services that others will buy, you will (still) eventually end up being poor."
DeleteI agree 100%
please try your best to disregard the typos... i was typing pretty fast whatever came to mind. :)
ReplyDeleteKrugman explains that the too muchers are people who view that the government intervention is what put the economy into a slump. The not-enoughers are people who think that the government should do more to fix the economy. The main reason we have been in a long slump is due to the fact that we are doing too-much for the too-mucher strategy and not enough for the not-enougher's strategy to work. We should learn from Europe that if we do not pick a side and both factions are more worried about their faction's political prestige than the general well-being of the economy, then the economy is doomed to collapse.
ReplyDeleteThe too-muchers are the side of the debate that believe that government intervention in the matter of trying to fix the slump will lead to something entirely worse. They believe that the government is over borrowing and over spending. The not-enoughers believe that we should spend more money, that we don't actually have, to attempt to stimulate the economy. they fear a decade long recession similar to what Japan faces.
ReplyDeleteThe reason why we are still in this slump is because neither side is willing to offer leeway for compromise or come to an agreement for one side or the other. While the two sides sit in stalemate with horns locked, our economy is, in essence, a sitting duck.
What we should learn form Europe is to stop spending money that is borrowed/non existent and avoid government intervention on the matter of the slump.
According to Paul Krugman the “too- muchers” are those who believe that what the government and central banks are doing is only going to push the country into a deeper slump and lead to greater consequences (such as deficit spending which can lead to a Greek type crisis).
ReplyDeleteThe “not-enoughers” are those, that includes Krugman himself, who believe that the government should promote overall economic growth and fear that the country might face deflation rather than inflation.
We are in what is known as an “economic slump” because of the poor decisions and wrong policies that have been executed by our government. With both the “too-muchers” and “not-enoughers” debating over which plan of action can better the benefit the country, we stand here loosing every minute that matters. For now America is better off than Europe with more jobs being created and deflation becomes less of a threat, but with one false move we may inevitably become what we were trying to avoid.
From Europe’s experience we can all learn that with improper use of policies can lead to bad results. This is mainly due to the influence of the “too-muchers” that encouraged Europe to engage in fiscal austerity even in an economy like theirs that, in result, raised Europe’s interest rates. Knowing what happened to Europe, we should be more cautious of the money we get and be able to control it so that America wont suffer from severe inflation or that of what happened to Europe, let the inflation gradually turn into deflation.
The “too muchers” in Krugman’s article believe that greater government involvement will most likely lead to inflation, and later, a crisis indistinguishable from the Greeks. The “not enoughers”, a position taken by Krugman, think that lack of action on the government’s behalf will most likely lead to a stagnate economy. This position also maintains that a deflation is the biggest risk for the economy.
ReplyDeleteThe titular “forever slump” is the lack of economic growth due to these uncompromising positions. Citing Europe situation as an example, the “too muchers’ held greater influence in Europe. This ultimately led to adoption of economic policies that would later send the economy reeling back into a recession. Only then, did Europe reverse the policies taken.
Influence from our “too muchers” are calling for more government involvement, but taken from Europe’s example, we should refrain from adopting any damaging policies on our fragile economy.
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ReplyDeleteThis article revolves around two opposing groups known as the “Not-enoughers” and the “Too-muchers”. The “Too-muchers” are conservatives and they fear that the actions of the government and the central banks are doing more harm than good. They predict that if efforts continue to improve the economic slump we are currently in a bigger more devastating outcome will occur. On the other side of the spectrum, the “Not-enoughers” who are much more radical believe that more change is needed. They fear that an early shift to austerity could cause a global crisis and that the biggest problem facing us is deflation.
ReplyDeleteI think that Krugman is siding with the “Not-enoughers”, “To say the obvious, none of the predictions and warnings of the too-muchers have come to pass”. The “Too-muchers” have too much say in the system and the “Not-enoughers” are extremely repressed even though the “Too-muchers” have been “wrong year after year”. Krugman doubts the intentions of the “Too-muchers” and in the article he is very sarcastic as to what they have to say.
Krugman also included Europe’s current economic instability. He explains that they have been experiencing inflation and low employment rates. However, he reassures us that America is in a much better situation because our employment has increased and deflation has become less of a threat. He is glad that the Fed has become aware of the economic danger in America, specifically Fed chairwoman Janet Yellen.
I think that the “Too-muchers” won’t be happy until they have all of the GDP stripping the middle class to nothing and leaving them as nothing but regulated serfs completely dependent on the upper class. This forever slump will last forever because it is a continuous cycle full of groups who will not agree with one another and greed cannot be overcome.
In Krugman's article, he says that the too-muchers arethe people who sees the government doing too much to stop the economic slump, and the not-enoughers sees that the government needs to do more to stop the slump. The not-enoughers believes in an increase of inflation rates to stop the slump. Krugman takes the side of the not-enoughers.
ReplyDeleteThe US is presently in an economic slump because the government has not made the best decisions in order to stop the sump. Our country has a similar situation to Europe in a way that two parties has risen due to the problem. And the slump will continue because the not-enoughers and too-muchers will not agree. In attempt to satisfy these people the government has been making some careful yet risky decisions.
We should all focus on one problem at a time and taking it step by step. We should try not to make any risky decisions and try to calculate the best outcome and then decide what to do.
By: Herculano Alves
DeleteThe "too-muchers" are a group that believes both the central bank's and the government's attempts of stopping the slump is just going to worsen the current situation.
ReplyDeleteThe "not-enoughers" are a group that believes the Federal Reserve needs to be doing more to boost the economy and see deflation as a major risk.
The reason the U.S is in an economic crisis is because the government has made both poor policies and decisions in the wrong areas. Both sides have yet to compromise on an agreement that can help our current problem.
A lesson we can learn from Europe is how to approach the slump. As of now, we can see that following the "too-muchers" has stalled economic prosperity and hasn't laid a dent in the unemployment rate. The U.S can take a different route and see differents results along the way.
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ReplyDeleteThe 'too-muchers" are the group that feels that intervention from the government and central bank is worsening the situation. The "not-enoughers" believe that the government should do more to combat the economic slump and would also like to see the Federal Reserve take more action. The U.S finds itself in a slump because both parties are failing to cooperate. As they continue to stall the road toward recovery, wrong policies are made and have proven detrimental to our economy. The U.S. is fortunate to not be in the situation Greece and Spain find themselves in. Around 2011 Greece's unemployment rate reached the mid-twenties and Spain's was just as poor. A lesson that the U.S. can learn from Europe is that a temporary rise in the inflation rate may not have a negative effect and could possibly stimulate the economy. I would also not mind seeing more leadership in recovering from this economic slump similar to that of Angela Merkel in the Eurozone crisis.
ReplyDeleteKrugman refers to the “too-muchers,” who are those who insist that there is too much intervening being done between the government, central bank and the economy. They warn the government that by acting too much, it may actually cause a negative solution, rather than th epositive one they were anticipationg.
ReplyDeleteSimilarly, “not-enoughers” believe that the government as a whole should do more to simulate growth and get us out of this “forever slump”. Krugman seems favorable toward the “not-enoughers” which is expected of anyone who is unimpressed by the work of the government towards decresing the deflation.
In reality, the “not-enoughers” tend to have a “too-mucher” mind set, leading them to believe that the solution is to step back, leading them to do less. And vise versa with “too-muchers” having a “not-enougher” mindset, convincing themselves that there isn’t enough being done to help the cause, leading them to do “too-much.” This “economic slump” that we seem to be stuck in is because rather than each individual group improving the economy in any way, they actually decrease the effectiveness by pulling against each others own progession.
Europe’s actions and current situation is teaching us of how having too opposing teams working against each other prevents progress for the country. In addition, by accepting temporary inflation, we can try to avoid the "forever slump" by acting carefully and cautiously rather than sporadically and immediately.
The too muchers are the group that believes that heavy government intervention will only hurt the economy.On the other hand, the not-enoughers believe that the government needs to further intervene or else we risk deflation in our economy. We are stuck in the forever slump because the too groups are at completely opposing viewpoints and cannot seem to come to an agreement on how fix the problem we are currently facing. Therefore only minor bills and policies are being created and passed because of the two groups butting heads. We should learn from Europe to not hit the brakes when the inflation begins to slightly increase like the E.C.B did and we should also not increase interest rates as they did.
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