The Long Run, the Short Run, and the Ugly

In response to Paul Krugman's article "In The Long Run, We Are Still All Dead"

In the medium run, in democracies, what happens will be determined by how the average citizen sees the world. If that's a scary prospect, consider how well the alternatives (to democracy) have worked. Right now, "the money has to come from somewhere" seems like the last word to too many people.

Too many of the intellectuals have taken the bait of the ideological terrorists, and succumbed to name calling and preaching to the choir. I am making an analogy here. When peace talks between Israelis and Palistineans start to seem thinkable, somebody on one extrem of the other, for whom compromise seems like the most despicable outcome, throws a grenade; the other side overreacts, a new cycle of violence begins, and the moderates who might have tried to solve the problem feel irrelevant again and tune out.

If world peace depends on Palistineans and Israelis talking to eachother, maybe it (or the economy which is tightly coupled with world peace) also depends on "Tea partiers" and liberals talking. Which seems more improbable?

If apparently self-evident statements like "the money has to come from somewhere" are stifling debate, maybe we need to focus on things that are more real than money, which is in a sense just numbers on computer disks. Like the real production capability of the nation, and the efficiency of transportation, or the continuity of the culture of work, or education and training. No stimulus means less debt, but years of atrophy of those real things that numbers on computer disks cannot summon into being -- mean less ability to repay debt when the business cycle starts to turn around. An inability to repay the (albeit lower) debt might very well mean in the medium run, more debt at some point in the "up" cycle, or more prolongued indebtedness.