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Too bad he doesn’t understand monetary operations and writes this out of paradigm stuff that undoes him in further discussion with the mainstream:
By Paul Krugman
What is true is that spending more on recovery and reconstruction would worsen the governmentâ€™s own fiscal position. But even there, conventional wisdom greatly overstates the case. The true fiscal costs of supporting the economy are surprisingly small.
You see, spending money now means a stronger economy, both in the short run and in the long run. And a stronger economy means more revenues, which offset a large fraction of the upfront cost. Back-of-the-envelope calculations suggest that the offset falls short of 100 percent, so that fiscal stimulus isnâ€™t a complete free lunch. But it costs far less than youâ€™d think from listening to what passes for informed discussion.