http://www.cnn.com/video/#/video/bestoftv/2009/06/28/gps.krugman.taylor.econ.cnn
I have often thought that, if there were an elected position like "President of the World", Fareed Zakaria would get the votes. A good example of how well respected he is around the world is that he can get the leaders of counties to come on his television show (Fareed Zakaria - GPS on CNN) when others cannot. Zakaria's latest effort to inform involves organizing a debate between two noted economists (Paul Krugman and John Taylor) on the need for the fiscal stimulus currently in effect. I have attached the video courtesy of Krugman's blog and I commend it to you.
For those of you who wish to reference back, check my 6/15 blog on Krugman vs Laffer where Krugman points out that rapid rises in the monetary base do not necessarily lead to hyperinflation. My thought on this is: do we want an increase in the deficit as a percent of GDP or do we want a "depression"? There is no debate.
Taylor points out that (politically) we shouldn't be sending people over to China begging them to buy more of our debt. How could I disagree with that? But, he goes on to say that the stimulus we don't need also includes a new health care plan which will add to the deficit...so what? Does he want 45 million people without health care?
On another note, I want to thank the folks who said they missed me when we went dark for a week - I was out in California at my son's wedding. I also appreciate the input that this is a good way to continue the classroom for those of you who have been with me over the years...your feedback continues to motivate me to overcome my computer-phobia.
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Well, the healthcare system certainly cannot take on 45 million more people. Innovation. I keep on ringing this bell, but it is true. Without a coordinated effort to improve the system, costs will increase. Lets not forget cost increases also stem from the unhealthy habits of many individuals, meaning the healthcare systems is not completely at fault. I used to believe growing debt is a big problem, but the U.S. has been taking quite a few direct efforts in research that will usher in new industries and trillions of dollars in the future. Plus, government programs like social security and medicaid/medicare can be altered (will be althered) in the future to limit public debt. Therefore, more debt would not be bad but must be used wisely. If more debt is blown on fiscal mismanagement, then we are in deep @#$%. On the other hand, pumping $100 billion annually into research will generate enormous tax revenue in the future as new innovations create new industries. Ideally, no debt would be nice. Then, we can save up money for problematic events. Does not China sort of lead the way on this issue? Its debt levels look much better than ours. Someone said our debt being owned by China gives them and incentive to not cause any economic or military problems for us... Not sure what to make of all this, but, if anything, both of these people seems to argue the impossible in the short term. Maybe these issues can change over ten years, but certainly not in the near future.
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