Never let it be said that Paul Krugman does not have a sense of humor. Granted, it might be unintentional, but I think all of us can get a good laugh out of his latest blog post entitled: “Deficits saved the world.” According to the Great One, who is responding to a Goldman Sachs analyst:
…government deficits, mainly the result of automatic stabilizers rather than discretionary policy, are the only thing that has saved us from a second Great Depression.
He then goes on to give a Keynesian Cross explanation of this nonsense. I had this today on the FEE webpage to help explain just how crude the Keynesian theory really is. Seeing Krugman’s recent blog, I certainly have not changed my mind on the ridiculousness of Keynesianism-Krugmanism.