Paul Krugman

Paul Krugman @paulkrugman

But nobody would say anything like that nowadays. Oh, wait 2/ https://t.co/tn0bdj6sgU — PolitiTweet.org

Paul Krugman @paulkrugman

Look, we're more enlightened than we used to be. Back in 1848 the magazine The Economist opposed efforts to improve public sanitation: 1/ https://t.co/HgzzssCOA6 — PolitiTweet.org

Paul Krugman @paulkrugman

So we're going to be experiencing a major fiscal contraction just as the direct hit from the coronavirus diminishes. This could really slow the recovery 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

Second, state and local governments are under severe financial strain. They'll have to keep spending during the medical crisis, but will have to raise taxes and/or slash spending to make up that later unless they get a lot more federal aid 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

But not enough talk, I think, about the fiscal side. First, the checks sent out by the CARES Act are one-time only, and expanded unemployment benefits expire after four months 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

People are focusing on the damage to balance sheets. Indeed, as the pandemic subsides many households/businesses will find themselves low on assets and high on debt, inhibiting spending 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Most forecasters still predicting a rapid economic bounceback in the 2nd half. But reasons to be skeptical, including some this (very good) article doesn't mention 1/ https://t.co/BknQWBJRx2 — PolitiTweet.org

Paul Krugman @paulkrugman

Private investment is tanking; private saving almost surely soaring. The government can borrow as much as needed, because we're awash in savings with nowhere to go https://t.co/hgxYDnGEfv — PolitiTweet.org

Paul Krugman @paulkrugman

In his Eurointelligence newsletter, Wolfgang Munchau writes "It seems extremely implausible to us that life will return to the status-quo-ante, which is the underlying presumption of virtually all the forecasts right now." Very much agree. — PolitiTweet.org

Paul Krugman @paulkrugman

US lost 9 million jobs in the Great Recession. Since UI doesn't cover all workers, we've probably lost more than that in just two weeks. — PolitiTweet.org

Paul Krugman @paulkrugman

Ungated pdf version here https://t.co/clEYvpSWVc — PolitiTweet.org

Paul Krugman @paulkrugman

For those who don't like reading pdfs, my short paper on coronavirus economics as a blog post https://t.co/Xdm1Rspnoh — PolitiTweet.org

Paul Krugman @paulkrugman

RT @BCAppelbaum: I did not know that the Trump administration has repeatedly invoked the Defense Production Act, basically for every reason… — PolitiTweet.org

Paul Krugman @paulkrugman

I did a tweestorm this morning about the economics of the coronavirus crisis, but I thought I might write things up as a short paper that expands on the argument. So, Notes on Coronacoma Economics https://t.co/clEYvpSWVc — PolitiTweet.org

Paul Krugman @paulkrugman

I talk to "not the American" Prospect about zombies https://t.co/oiehH1u2tf — PolitiTweet.org

Paul Krugman @paulkrugman

Another way to summarize my economic thoughts on the coronacoma https://t.co/7Yv5YTwqK1 https://t.co/KK1cTDXxDg — PolitiTweet.org

Paul Krugman @paulkrugman

Read it and weep for America 2/ https://t.co/I1rATdtEXj — PolitiTweet.org

Paul Krugman @paulkrugman

Already happening on social media 1/ https://t.co/DKurGwP2G1 — PolitiTweet.org

Paul Krugman @paulkrugman

RT @MattGertz: Get ready for an incredibly ghoulish push by Trumpist media to question the number of deaths attributed to coronavirus in or… — PolitiTweet.org

Paul Krugman @paulkrugman

Oh, and don't tell me about the stock market. Stocks actually rose during the deadly 1919 influenza pandemic. 11/ https://t.co/KWubPJjSt7 — PolitiTweet.org

Paul Krugman @paulkrugman

In particular, I've been talking about laid-off workers, but state and local governments, which must balance their budgets, are also facing crisis and desperately need federal aid. So that's the next frontier in this policy struggle 10/ — PolitiTweet.org

Paul Krugman @paulkrugman

So we want massive, debt-financed disaster relief while the economy is in its medically induced coma. And while we're doing some of that — that "stimulus" bill was far better than the things Rs were talking about a week earlier — it's still not nearly enough. 9/ — PolitiTweet.org

Paul Krugman @paulkrugman

Add in slumping investment — who's going to build office parks and houses in a plague? — and you have vast savings looking for someplace to go. Real interest rate on long-term debt is -0.25: investors basically paying feds to take their money 8/ https://t.co/Z3HuSsufv6 — PolitiTweet.org

Paul Krugman @paulkrugman

After all, it's not buying (not allowed to buy) N products; most of that foregone consumption will probably be reflected in saving, rather than increased purchases of still-available goods. Savings rates of still-employed households are surely soaring 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

You might ask, how do we pay for this massive disaster relief? The immediate answer is borrowing. But where will the borrowed funds come from? The answer, mainly, is the E sector. And why will that sector provide funds? Because it has drastically cut spending 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

So this is basically disaster relief, not stimulus, although there is a stimulus element. After all, without aid those unemployed N workers will cut purchases of E products, leading to a second round of job losses, which we also want to prevent 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

In particular, how are laid-off workers in the N sector supposed to keep buying essentials? They need aid — and when you consider how much of the economy is being shut down that aid has to be on a massive scale. $2 trillion isn't nearly enough 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

This isn't a conventional recession; it's more like a medically induced coma, where you temporarily shut down much of the brain's activity to give it a chance to heal. But doing this requires that we provide life support 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

My stylized model of the economy right now looks like this: there are two sectors, essential (E) and nonessential (N). What's mainly happening is that we are — rightly — shutting down N to limit social interaction and flatten the curve. 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

It seems to me that a lot of the economic discussion of Covid impacts and policy response is still using the wrong metaphors and models. For example, we keep hearing about "stimulus" bills when that's not mostly what they are. So, some thoughts 1/ — PolitiTweet.org