Separated at birth? Frankly I'd rather hear Clooney's take on the global economy than the shit spouted by his Keynesian fanboy doppelganger. Krugman has never met a problem that couldn't be solved by throwing piles of government debt at. Lately he's been yapping about the failure of the G20 to agree to engage in more ridiculous "stimulus" resulting in the onset of the next Depression (somewhere he missed the memo that we can't actually prevent the recession and should have embraced it rather than trying to delay the inevitable and wasting trillions in doing so).
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.Seriously, Krugman needs to shut his frickin piehole, because the more he yaps, the more the people at Nobel should seriously consider yanking the joke of an award the Nobel prize in economics has become. The only thing Krugman is "correct" about is that this shitstorm has been brought on by a failure of policy. But he completely misses the mark on what that policy should look like. Mish has far more on Krugman's ineptitude at in How Policy Errors Cause Depressions (and how "in isolation" some things Krugman says make sense)
The problem of the G20 is that some countries (the EU) are beginning to "get it"; where "it" is that you can't endlessly borrow money to prop up a bunch of zombie banks that lent money to anyone with a pulse because eventually the funding from the bond market dries up when they start demanding yields approximating the likelihood of the weaker players actually being able to make good on their debt (Greece, Spain, and the rest of Club Med). The bigger idiots (US and Japan) still haven't figured out that the same principle applies to them, (eventually).
Clearly the solution to the problem of too much debt is even more of it. If I can't maintain my personal spending level, it makes perfect sense that I should borrow more than I make to come up with the difference. Even if I'm spending 10-20% more each year annualized while my income is growing at a paltry level of 1-2% which isn't sufficient to maintain my standard of living. Obviously, tt is the banks responsibility to give me the money I need (want) to spend...and I promise to pay it back sometime...in the future, assuming I get a big raise...if I feel like paying it back...and if not, well I'll just borrow more and add it to the IOU, right? Clearly the banks don't really care if I pay back the principle.
A child could understand the simplistic notion that piling on ever more debt is not sustainable. Unfortunately for us, many economists and most politicians today do not.