Raghu writes: >> The answer to your question is very easy: >> 1) There is no numerical debt level that is "just right" for all >> economies under all situations. But it is quite obvious that both >> extremes are absurd i.e. it is silly to argue either that the debt >> level always needs to be zero or that arbitrarily high debt levels are >> fine. >> >> 2) It is hard to tell what the "just right" debt level is, but it is >> trivially easy to tell when we are far from the "just right" level in >> either direction. Krugman and others have provided detailed and >> well-reasoned explanations for why they believe that the current US >> Federal debt levels are way too low. See for e.g. the following >> Krugman post and links therein: >> http://krugman.blogs.nytimes.com/2010/06/01/pre-refuting-william-galston
I took a quick look and PK claims to have refuted the argument that a debt level of 90% of GDP is a red line at which point bad things happen. Leaving aside whether PK is accurate, the fact that bad things do not necessarily happen at some stated percentage does not tell us that bad things won't happen in any specific instance. So the question remains unanswered -- how does PK know, in any given instance, the "just right" amount of debt? David Shemano _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
