Princeton economics professor and Nobel Laureate Paul Krugman laments the smallish $800 billion stimulus of last year and says we should now double down with another $800 billion.
On what’s going through the mind of fixed income investors, Krugman says:
The bond market is telling us not to worry about the current deficits. They’re happy to lend the federal government money at very low rates. What the bond market is telling us is they’re terrified of deflation and of a weak economy for a very long time.
They’re also terrified of the stock market…
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
And I’m terrified of Krugman.
I think you’re right about the flight to safety. But given the conditions, it’s criminal for the feds to not be borrowing more for infrastructure with money so cheap.
The proof: http://www.capitalspectator.com/archives/2010/08/is_there_an_aus.html#more
[...] to mention your incessant buying into the Republican talking points about deficit-reduction when we need a real stimulus from the bottom-up makes me really wonder about you. I’m sure you’re familiar with Republican strategist Jude [...]