Let me explain it to you in terms a high school freshman can understand, Mr. Krugman Ohms Law V=I*R. V is voltage, aka demand or potential profit. I= current, or what gets pulled through the system. R is resistance, or the load the system puts on the circuit, analogous to government regulation. Watts Law P=V*I P is power output, or growth of the economy. I is still the beneficial part - what gets pulled through the system. Demand is set by set factors - what has gone before. R is what the government controls. I is the result. But when R increases, I decreases, and therefore growth decreases. Growth is inversely proportional to the government load. And heres the real trick: V(t+1)=v(t)+P(t)-k Demand at a point one period from now equals demand now, plus the growth now, minus a significant constant. Too much resistance, growth slows below entropy and bad things happen - the economy gets worse instead of better. This is what Robert Heinlein meant when he said the people who cut their own throat call it bad luck We were hearing this crap from the Keynesians about low growth and stagflation being endemic in the system all through the sixties and seventies. It was really due to the tax code incentivizing people to put their money in places that were bad for the economy. Reagan persuaded Congress to change that, and the result was the highest period of growth weve had since WWII. Since then, the rate of growth of the government load has increased by leaps and bounds. The base resistance to growth in the economy is ten times what it was thirty years ago. Change that, and things get better. So no, I have absolutely no sympathy for your claims of a permanent slump, made to benefit your political agenda (like everything else youve done for the past fifteen years). The people in control of the government did it to themselves. nytimes/2013/11/18/opinion/krugman-a-permanent-slump.html?_r=0
Posted on: Mon, 18 Nov 2013 22:44:37 +0000
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