Paul Krugman's latest article would rebuke those economists and pundits who believe the United States will soon or eventually suffer through a dangerous bout of inflation, with the coming price instability caused by the Obama recovery-stimulus program. Yet "Deflation," Krugman claims, "not inflation, is the clear and present danger." Why, then, would the fear-mongers miss this point, assuming Krugman rightly claims that deflation is the real threat? Krugman believes they have an axe to grind and are thus politicking the issue:
…it's hard to escape the sense that the current inflation fear-mongering is partly political, coming largely from economists who had no problem with deficits caused by tax cuts but suddenly became fiscal scolds when the government started spending money to rescue the economy. And their goal seems to be to bully the Obama administration into abandoning those rescue efforts.
Needless to say, the president should not let himself be bullied. The economy is still in deep trouble and needs continuing help.
The market fundamentalists, it seems, would rather watch the economy collapse than to see the federal government implement the kind and number of reforms needed to effective manage the crisis.
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