Paul Krugman

Paul Krugman @paulkrugman

And the idea that we need to save fiscal ammunition for future programs is completely backwards. Remember 2009! The constraint is political, not financial; what we need is a program that delivers tangible benefits to voters, showing them that govt can do good. 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Fear of inflation are greatly exaggerated: the economy can probably run hotter than CBO thinks, the multipliers on a lot of the spending probably aren't that high, and the Fed is well able to contain inflation if it becomes a problem 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

My long form defense of going big on pandemic rescue. IT'S NOT ABOUT STIMULUS. It's like fighting a war (on pandemic fallout.) And you spend what you need to win a war, not just enough to close the output gap 1/ https://t.co/KxEgDNfrOv — PolitiTweet.org

Paul Krugman @paulkrugman

I often groan over the carefully constructed acronyms that rule these days — the CARES act was great, the HEROES act would have been great, but the names were a bit ... tacky. But better than than mess up good policy ideas with accidental humor 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

But the 70s were a golden age for bad acronyms; Nixon's Committee to Reelect the President, or CREEP; Ford's Council on Wage and Price Stability (everyone I knew pronounced COWPS "cowpiss") 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Silly side note: it may be helpful to think of the Biden plan as the fiscal equivalent of war. But this brings back memories of Carter's Moral Equivalent of War energy policy; unfortunately, MEOW was not a good acronym 1/ https://t.co/fcxs96YgJ8 — PolitiTweet.org

Paul Krugman @paulkrugman

Silly side note: it may be helpful to think of the Biden plan as the fiscal equivalent of war. But this brings back memories of Carter's Moral Equivalent of War energy policy; unfortunately, MEOW was not a good acronym 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

We'll see if we really do overheat. But the idea that this is a gratuitously large plan confuses the goals of the policy with the macroeconomics of getting it done 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

So if you're worried about overheating, you shouldn't focus on the notion that the plan is too big; your real concern is that, like fighting a war, doing what needs to be done may be inflationary. And the answer in that case is not to do less, but to limit the inflation 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

In particular, most of those "stimulus checks" will probably be saved, and aside from the fact that state/local aid is largely a way to head off fiscal contraction, any excess will probably be banked. 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Now, wartime spending isn't about stimulus, but is nonetheless stimulative, and overheating can be a real concern. But the Fed can contain inflation; and in any case the less-essential parts of the plan probably have low multipliers 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

Mostly the plan is about directly fighting the pandemic, reopening schools, avoiding cuts in vital services, and helping families in dire need. Ideally we might achieve these goals at somewhat less cost, but speed and simplicity are more important than perfection 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Is everything in the Biden plan well-targeted on our needs? No. But the controversial part, checks to most of the population, is just a fraction of the plan 3/ https://t.co/f0i44Wvt9O — PolitiTweet.org

Paul Krugman @paulkrugman

When you're budgeting for a war, you don't decide how much to spend by estimating what it would take to fill the output gap; you estimate what it would take to win the war. 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

So is the Biden plan too big? We need to be clear about what it's for. IT'S NOT STIMULUS. This isn't at all like the ARRA, which was all about boosting demand; this is disaster relief. Or maybe it will help if we think of it as being like fighting a war against Covid fallout 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @JanetGornick: February 17, 7:30pm, virtual event. This panel will assess the economic recovery that seems to be on the horizon. Who wil… — PolitiTweet.org

Paul Krugman @paulkrugman

At the checkout line https://t.co/16AMgGaBWf — PolitiTweet.org

Paul Krugman @paulkrugman

Reupping for people who may have missed it: I've started a non-Times blog/newsletter for wonkier stuff. Free, at least for now. First entry here: https://t.co/uXZM6K9t4L — PolitiTweet.org

Paul Krugman @paulkrugman

The point is that this is an economic team with actual thought behind its policies, able to deal with good-faith critiques even when, as I think Summers's is, they're somewhat wrong-headed. We're not in Trumpland anymore 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

This is a strength. Policies are better because they emerge from informed discussion; the political force behind these policies won't be dissipated the first time someone points out the emperor is naked 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

If the Summers critique actually threatened to derail economic rescue, I'd be upset. But the Biden people are ready with counterarguments, and have their political ducks in a row. So what we're actually seeing is that determined policy can survive serious debate 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

As Kevin Drum pointed out long ago, there's a "hack gap" between the parties: even Republicans who should know better fall in line to back the party line, as economists did for the 2017 tax cut. Democrats, not so much 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

I mean, suppose that the Fed ends up hiking rates because unemployment is 3.2% and the economy is growing at 8%. Would that be so bad? But while I don't think Summers is being helpful, the fact that he is weighing in like this says some good things about Democrats 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Lots of people are dunking on Larry Summers today, and in my view rightly so; this piece by Jordan Weissman seems especially on point. Yes, a rescue package this size could lead to overheating, but how bad is that? 1/ https://t.co/X4ArVunvpg — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: .@paulkrugman responded to readers who commented on his column, "Pumps and Dumps and Chumps." Read their exchanges here: ht… — PolitiTweet.org

Paul Krugman @paulkrugman

So any worries you might have about excessive demand should be alleviated by this de facto "automatic stabilizer" aspect of the plan 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

One important point about the Biden plan: to the extent it provides stimulus, that will fall if the economy does better than expected. Unemployment benefits will shrink if unemployment is lower; state and local governments will bank some of their aid if revenue rises 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

So the Nebraska GOP is going to censure Ben Sasse for having “persistently engaged in public acts of ridicule" against Trump. Couldn't help thinking of this https://t.co/ri1sVaTPUE — PolitiTweet.org

Paul Krugman @paulkrugman

Exactly. — PolitiTweet.org

Paul Krugman @paulkrugman

Far better to run the risk of needing some monetary tightening a year from now than risking an inadequate plan that repeats the mistakes of 2009 ... 3/ — PolitiTweet.org