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“It is, instead, a grotesque abdication of responsibility.”

May 30, 2011 4 comments

There are 44 Million People on Food Stamps in the Richest Country in Human History

Paul Krugman hits another one out of the park today.  Talking about the number of people that are unemployed, he says this:

“So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility.”

It’s true.  It’s a tragedy of vast proportions that we allow this much unemployment.  I shudder at the number of families that are being broken up now – today, as I write this – due to the mom and dad fighting about money.

It’s actually even worse than Mr. Krugman thinks.  The mainstream economics profession makes a huge mistake when it assumes the no-Ponzi assumption is knowable. The no Ponzi assumption is the beating heart of the Government Budget Constraint, and the government budget constraint is the reason bond vigilantes are rumored to exist, and the reason James Carville wants to come back as the bond market.

But mostly, the Government Budget Constraint is why we allow force tens of millions of people to live lives of worry and misery rather than as productive adults.   And the Government Budget Constraint is wrong.  It’s frackin’ wrong.

This is not  just some academic argument – this bullshit assumption makes hundreds of millions – even billions –  of people far more miserable than they need to be.  People are suffering because the economic profession assumes something to be true which is worse than false.

With the no-Ponzi assumption in place, there is and must always be a tradeoff between inflation and putting people to work.  And the no Ponzi is wrong.  It’s frackin’ wrong.

We can put people to work without worrying about inflation.  This is truly a “grotesque abdication of responsibility.”

[Update:  Tom Hickey points out that Greece is likely to give up sovereignty to appease creditors.  Let’s hope we are witnessing the “blow-off top” of this horrible non-idea.]

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