Paul Krugman

Paul Krugman @paulkrugman

A cautionary tale for economists who engage with the public: last night I spoke with a very progressive commentator who was worried about the inflation effects of student debt relief. And the conversation was a reminder that normal human beings don't know about magnitudes 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Well, the PCE report — which the Fed prefers to the CPI — looks even better than the CPI did. Monthly data are noisy, and the three-month average still suggests core inflation >4%. So no victory celebrations. But good news all the same https://t.co/dWWDYU3aJ4 — PolitiTweet.org

Paul Krugman @paulkrugman

RT @senpattykuderer: "And to Republicans whining that this plan does nothing for blue-collar Americans who didn’t go to college, a question… — PolitiTweet.org

Paul Krugman @paulkrugman

Dire warnings about inflation don't hold up when you do the math https://t.co/uuYDCQ72O2 — PolitiTweet.org

Paul Krugman @paulkrugman

Dark Brandon has street-fighter instincts. Who knew? — PolitiTweet.org

Paul Krugman @paulkrugman

RT @JohnJHarwood: the vehemence of those criticizing Biden's student debt relief plan, economists and otherwise, is remarkable — PolitiTweet.org

Paul Krugman @paulkrugman

Debt relief will have a cost — probably in the form of slightly higher peak Fed funds rate rather than higher inflation. But all the scary talk about heaping fuel on the inflationary fire is peculiar 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Add in that the Fed is in the process of doing whatever it takes to bring inflation down. Do we seriously think that debt relief will frustrate the Fed's efforts? 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

If we ignore the role of the Fed, this means that output and inflation will be a bit higher than they would if the contractionary stuff wasn't offset. This doesn't mean inflation higher than it is now, and the difference will at most be a fraction of a percentage point 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Such a strange debate over debt relief and inflation, especially the unhelpful discussion about baselines. Here's what we know: the end of the payments moratorium will be modestly contractionary; debt relief will offset some but not all of that contraction 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Is it just me, or are economic data starting to feel like a Rorschach test — what you see says more about you than about the data? — PolitiTweet.org

Paul Krugman @paulkrugman

You can argue that there would be better uses for the money. But are there better things *Biden can actually do*? What are they? 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

There's something bizarre about the way many centrists are joining in on the inflation scaremongering here. GS estimates debt payments will fall from 0.4% to 0.3% of income. How is this alarming? 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Maybe you don't believe me when I say that the math doesn't support claims that debt relief is inflationary. But the socialists at, um, Goldman Sachs reach the same conclusion 1/ https://t.co/WCJEVbl05d — PolitiTweet.org

Paul Krugman @paulkrugman

Again, I can see reasons to oppose this move, although you want to compare it not with what we should do ideally but with *what Biden can actually do*. But spare us the inflation scare talk 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

The argument "but it will be inflationary" seems so obviously wrong, so inconsistent with the math, that, as I said, it's baffling. Maybe people who oppose this move on other grounds are just going for the cheap shot? 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Second, to the extent that deficit spending was inflationary in 2021, it was because the Fed was accommodative — complacent about inflation (yes, like me) and unwilling to raise rates. These days, any expansionary impact, if there is one, will be offset by monetary tightening 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

First, the US is a very big economy. Any impact of this forgiveness on spending will be small relative to GDP. If you want to compare with the Rescue Plan, this is roughly 1/10 the size, with effects likely to be spread over multiple years. Just not big in macro terms 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

There are arguments against Biden's student loan forgiveness plan — is this the best use of ~$200 billion? Is it fair to those without such debt? Also arguments for, which I'll have more to say about. But all the talk about inflation is fairly baffling, for two reasons 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @GagnonMacro: Yes. But the real reason to read this story is the link to Sierra Hull playing an excellent and haunting rendition of Mad… — PolitiTweet.org

Paul Krugman @paulkrugman

It will be terribly rude if lots of people tweet out images of Ron DeSantis making a fool of himself by cosplaying as a fighter pilot https://t.co/u9cU9sdQlv — PolitiTweet.org

Paul Krugman @paulkrugman

I'd love to argue against interest rate hikes. But I can't. https://t.co/UI5pAYoxzl — PolitiTweet.org

Paul Krugman @paulkrugman

Just FYI, Cleveland Fed nowcast suggests that August will be another month of almost no inflation https://t.co/Cgu5IOEvIG — PolitiTweet.org

Paul Krugman @paulkrugman

CBO projects cumulative GDP of >$300 trillion over the next decade. Student debt relief, if it happens, will be rounding error — maybe 0.1 percent of GDP? Talk about fairness, incentive effects, whatever, not the supposed effect on prices 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

These are the things we should be talking about, not alleged inflation risks 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Here's the more or less official GOP "plan." If there's any substance, I can't find it https://t.co/WkY7mnNdAu — PolitiTweet.org

Paul Krugman @paulkrugman

Republicans are running almost entirely on inflation. But when asked what they'd do about it, their response is "Look over there! Immigrants!" https://t.co/ciDtZEw3MT — PolitiTweet.org

Paul Krugman @paulkrugman

RT @ChadBown: Today, Russia's and China's trade surpluses are signs of weakness. The situation offers a useful corrective to the common not… — PolitiTweet.org

Paul Krugman @paulkrugman

Unfortunately, the FAO doesn't break out the price of crudités 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Not likely to sway the Fed, which is focused on core inflation. But still good news, suggesting that our current period of inflation relief may last a bit longer 2/ — PolitiTweet.org