Saturday, July 10, 2010

If a conservative think-tank dismisses inflation fears, will anyone listen?

Well, not EXACTLY a conservative think-tank, but more like a Libertarian think tank, the American Enterprise Institute's John Makin issued an outlook that describes how Keynes was RIGHT, and how the real threat was never inflation, but deflation.

So do you think people will listen and finally believe if both sides are saying the same thing?

Maybe not.

After all, as Paul Krugman points out, these arguments were played out in 1932, and in some respects, history is repeating itself, including President Obama's Administration's timidity on the first stimulus, and the fear of trying to get a second stimulus passed.  The difference this time...we could be facing a Republican bloc that will - despite their intentions - turn this into the 3rd Depression.

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