Thursday, May 26, 2011

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.

5 comments:

getyourselfconnected said...

The markets went up because the seond order derivitive of some measure for contraction went up some, now those same items indicate contraction, but it is still good? No idea, but I did roll FURX for some cash this wekk, lol.

Stagflationary Mark said...

GYSC,

FURX? Furiex? That sounds more like a barbaric clothing currency exchange than a pharmaceutical company!

High prices leave the polar bear population at risk

At a time when polar bear hides are fetching between $5,000 and $11,000 at auction—double the price of just a couple of years ago...

We are going to be SO prosperous in the years ahead that I won't even know what to post about.

MaxedOutMama said...

Illusions, Mark. Illusions.

Charles Kiting said...

Krugman and De Long sound more like degenerate gamblers than economists. They're saying you should loan them more money because they have no way of paying the other money they owe you without it.

Eventually someone's going to break their legs.

Stagflationary Mark said...

MaxedOutMama,

For what it is worth, my latest post is a tribute to an illusionist!

Okay, it is the Chief Economist at the National Association of Realtors. That's close enough though, lol. Sigh.

Charles Kiting,

Just one more bet at the roulette table! Just one more! I'll stop if I win it all back! I swear!! You know I am good for it! I always print the paper needed to pay my debts!

But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. - Bernanke, 2002