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Defending Cato from the Predictably Inaccurate Ramblings of Paul Krugman

Paulus Textor Wrote: Feb 18, 2013 8:24 AM
Good column by Mitchell. The easiest way to grasp most problems in economics is to apply them to a typical family. What is true for the family of four is also true for the country as a whole. A family that is way over its head in debt, for example, cannot solve its debt problem by taking out a few more lines of credit. Neither can the government, by increasing the national debt. A family cannot "spend itself rich." Neither can Washington, DC. A family that prints fake money on its basement printing press, should go to jail. So should those in Washington who do the same thing.

Writing for the New York Times, Paul Krugman has a new column promoting more government spending and additional government regulation. That’s a dog-bites-man revelation and hardly noteworthy, of course, but in this case he takes a swipe at the Cato Institute.

The financial crisis of 2008 and its painful aftermath…were a huge slap in the face for free-market fundamentalists. …analysts at right-wing think tanks like…the Cato Institute…insisted that deregulated financial markets were doing just fine, and dismissed warnings about a housing bubble as liberal whining. Then the nonexistent bubble burst, and the financial system proved dangerously fragile;...