Home | Economy: Krugman on Wage Deflation

May 4, 2009

Libertarians and their right-wing friends are freaking out about Barack Obama's spending plans, because they think it will cause inflation in the prices that they pay for goods and services. I tend to think that they are worrying about precisely the wrong problem. It's deflation, not inflation, that we should be worried about, as Paul Krugman writes here. More stimulus spending is likely to assist in righting the ship, though of course there are some problems with that as well.

-- Aaron | Link

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