1. David_Lazarus says

    Ron Paul is right in some respects and so wrong in others. He is right that savings are essential and higher interest rates in the past would have maintained savings as well as slowed down the bubbles and growth in government spending. Though by going to a gold standard the US economy would implode. Krugman is not a great debater so that is probably why he comes off so weak in this talk. 

    1. fred-Bobby says

      and Ron Paul is a good debator? Maybe Krugman has no leg to stand on that why he sounded out gunned. Forcing a gold standard at a fixed rate and preventing free market commodity certificates to circulate would destroy the economy but that is not at all what RP is saying. He simply advocates for allowing people to use what money they would like to use and naturally gold, silver, oil etc, backed certificates would likely spring up. In this computerized world it would be very simple to do but the Feds prevent it and lock up people who try to create silver certificates and coins like “liberty dollars” for 15 years! WTF

      1. David_Lazarus says

        Yes but that ignores the spectacular problems that a gold standard brings. The 1873 depression was worst of all and that was before the creation of the Fed and the ending of the gold standard. It curtails the governments ability to intervene to maintain full employment. What monetarism has done is obtained control of inflation through the creation of permanent unemployment. Current policies pay lip service to full employment and are ignored in reality. Austrian policy like Ron Pauls is possible if you are close to achieving it. Otherwise it involves great pain getting there. Look at Europe as an example. 

    2. Casonbeckham says

      you say “by going to the gold standard the US economy would implode.” i recommend you read the book Currency Wars. specifically, read the section entitled “Return to the Gold Standard” on p. 235. 

      1. David_Lazarus says

        Countries need a strong currency and a gold standard would give them that, but it would significantly curtail the ability of the government to rescue the economy when needed. There could be very little stimulus spending. What irks me is that politicians will want a strong currency but not push policies that do that. So that would have blocked the bush tax cuts as being fiscally irresponsible especially when there was no deficit at the time. It would have raised taxes to pay for the wars. So far neither adequately dealt with the real source of the crisis and that is excessive private debt. Without that debt the ability of the private sector to cope is increased. 

  2. Norman Smith says

    Ron Paul, “The debt comes out of the market place and causes unemployment.” That’s true in Europe, you can watch it happen right now. Just flick on the news. It’s not true in the US. Score one for Paul Krugman and he didn’t even comment on it. In fact, he didn’t debate well. This was the Ron Paul show.

  3. @jporter says

    I never realized that Ron Paul was considered a “pillar of economic thought”. 

    1. Beauner says

       Thats because you never realised truth before

  4. Logo & Shibboleth says

    Around 2:30 Krugman said he doesn’t know for sure what money is.  I would say the debate should have ended right there, but no, he went on to prove that he doesn’t know.

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