The Sarcasm Report v.104

May 25, 2011
Krugman: Third Depression Watch

As Brad says, these estimates now suggest that we have now gone through a year and a half of “recovery” that has failed to make any progress toward closing the gap between what the economy should be producing and what it’s actually producing.

Apparently there is some sort of gap between what the economy should be producing and what it is actually producing. I can only assume that they mean debt. Our country simply isn't producing enough of it.

It certainly can't be the production of goods and services. I see no shortages of anything that I either need or desire. For example, I'm confident that I could have my pick of many restaurants this very evening without even making a reservation first.

Since deficits saved the world from the second depression, I wonder how much higher our deficits will need to go to save us from a third depression? And a fourth? And a fifth?

Put another way, how high will the deficits need to go before I feel so financially safe that I would be willing to trade part of my long-term retirement nest egg for short-term dining out experiences?

I think my answer might shock them. Here's a ballpark chart.



Perhaps I'm simply not extrapolating it out far enough. It could be true. $100 trillion deficits would tempt me to convert all of my nest egg into one last meal. Something is better than nothing I guess. That last meal certainly won't feel like a free lunch though.