I think Paul Krugman generally has this right, except that with worldwide excess productive capacity, we are entering a period of competitive currency devaluations among nations. The U.S. is probably doing what is immediately necessary, but there will be unintended consequences. In general, every nation wants to get richer (or at least out of debt) by exporting, and devaluing one's currency is a ready means to further that goal. The fiat currency race to the bottom has begun.

Another day, another article full of off-the-wall Krugmania.

The beggar-thy-neighbour policies that the US is clearly pursuing is to weaken the dollar to a) stealth default on its mountainous debts and b) put itself in a more competitive position when it comes to exports.

As for Americans now being 'world improvers' by printing money, this is absurd. No-one is ever called an idiot by saving too much, and no-one is ever called clever by spending beyond their means, fabricating ever more complex lies (i.e. QE2, soon to be QE3, QEx) to cover up a farce, wrapped in joke, inside insanity.

I pose to you a question, Mr Krugman: Tell me, please, which average American is better off with the dollar at all time lows against various countries worldwide? It isn't, at least not in a reality outside of Krugman's stinking, suffocating self-justificating santiy-deficient sinkhole. When the dollar hits all time lows agaisnt currencies across the board - Japanese Yen, Swiss Franc, Aussie Dollar, etc etc - Americans are, yes you guessed it, WORSE off.

This man is dangerous, as is his partner in crime Helicopter Ben. Between them they are capable of bringing down any credibility America and the dollar has left.

Phil doesn't bother with any facts, he just spouts off "what everybody knows" statements and calls people names. Krugman has a Nobel. What you got, "Phil"?

Money is not the problem. Trade is the problem. "Free trade" is killing us all. We need to have FAIR TRADE across the board . We cannot get jobs in the US and elsewhere because the corporations and money managers have outsourced our jobs and destroyed our workforce to compete because of the so-called cheaper labor in undeveloped nations. Until that imbalance is dealt with in an honest way, we are doomed to capitulating to the corporate crooks currently bleeding our economy to death.

Even as we read and write this, Democrats are still thinking of working "with" Republicans! If our Senate does not allow the tax cuts on the wealthy to expire, the next thing will be raising taxes on the poorest of the poor as well as the somewhat wealthier middle class. What a prospect. How do we get out of that Mr K?

roger - I'm not sure which are these 'everybody knows' statements are. Englighten us.

And as for facts, what are you looking for? The fact that your purchasing power is now the lowest it has been in the history of all those wonderful green dollars that you own? The fact that feeding dollars through the economic fan isn't preventing 10% unemployment? A continued decline in house prices? Record government debts? Record imports? Record numbers of people on food stamps?

Have you considered that all the facts above could, in fact, be exacerbated by these misguidedly pernicious efforts?

To your other point: Does someone having a Nobel prize mean that everything they ever said, say and will say ad infinitum is definitively right? That all that mutter in contrast to their views are definitively wrong? Before Krugman had won the prize, presumably you could have used that very argument against him?!!

I wonder if Mr Krugman would read this:
http://www.project-syndicate.org/commentary/fan20/English
As an assessment of Chinese policy, it interests itself in what he leaves out - the people. Eocnomists always just discuss abstract economic numbers (and sometimes corporate interests). If I'm going to a Nobel winner, I think I'll stick with Stiglitz, who tends not to do that.

According to Krugmanspeak, high prices are good, low prices are bad. Kruggy the court jester would have us believe that shifting more production to the US is better for all, when, it is obvious that Americans are fat, lazy, and corrupt, while the Chinese, are considerably more hard working and inspired.

My main concern with the Fed's actions stem from a side effect of the t-bill purchasing plan in which they intend to advertise in advance of their t-bill buys so that investors may buy them up from the Treasury dept at the going sale rate and sell them to the Fed at full price. This has the net effect of enriching the buyers at the top of the market who can afford to make large purchases of t-bills, so once again enriching the already wealthy, while some argue passing on the long term debt to the government itself.

"Until we fix the education ...we'll crank out unqualified people ...."

This assertion by firms in the US that there are not enough qualified people is simply untrue. There are plenty of qualified individuals who are ready, willing, and able to do what is required, but most big firms have been reaping what they sow in terms of frozen wages.

They kept wages frozen, and then claimed to be "wronged" when their hires leave after a year or two, and started to refuse to hire labor that wasn't canned, and round and round it goes.

Until they're willing to give raises to people as they gain in experience and productivity within the firm, they will get a raise the only way they can, but hopping jobs and asking for higher starting salaries, which are usually the same as their ending salaries.

bubbling smelly crap

Scrolling through this article and the comments that follow show you the irrationality and miseducation of people at all levels. Krugman wants a race to the bottom, his critics want to defund the government.

Krugman asks, "what else can the United States do?"

TARIFFS, motherfucker!

You don't like being flooded with Chinese imports? Tax them until our manufacturers can compete without destroying our living standards. You may remember this concept from when you were being trained as an economist.

While you're at it, learn something from the Chinese, who are following the American tradition – keep speculators the fuck out of your economy, and build some infrastructure! Bankrupt Wall Street's derivatives, kill the futures markets by supporting producers, protect real banks and corporations from hot money and stock market pressures, and negotiate fixed-rate exchange agreements with China, Russia, India and other real nations.

We've had this fight many times throughout history, and it just takes someone with balls (Hamilton, Lincoln, FDR) to put the program in action. While we're at it, we can cut funding and ties to Israel and Britain, and start forming healthy relationships to countries that want to be our partners and not our parasites.

Paul Krugman is a moron to the nth degree.

I really don't care about the economic, monetary & other tricks which abound in the fiat money, fractional reserve various rip off schemes. Even a war with Iran which is seeming less out of the question than I once thought which would destroy the entire world economy does not really scare me because money, economics, law, trade etc. are man made systems that go up & down. My concern & at 67 I don't know why I care is the catastrophic climate change which is rapidly approaching the tipping point where the feedback mechanisms will overwhelm anything we puny humans can do & no one in a position where they could do something is doing anything substantiative. Utter madness, made worse with the election of Republic-deniers to the house. We have gone from a slim chance of stopping the climate mess to essentially zero chance. Yes, I know the rich & even the middle class will just pay more for AC but water & food will be in short supply & many will live lives of abject misery; wars over water & food & land(there will be less) will break out & although I know this is good for business, especially American business in the short run, it will be worse in the long run. Truly, woe is me!

Its about "free trade" just like others said. I don't know if you saw Donald Trump on the news the other night but he was bang on about China's flooding our market with goods that are sub-par but that we cannot price-compete with. We need immediate tariffs on countries that do not set their currencies on the open market and that volume/population and governmental systems must be taken into account when evaluating tariffs. Allowing a country that does not conform to monetary standard OR pay its citizens at the same rate as our own to DUMP product onto our market at ridiculously cheap prices is criminal.

Krugman is a corporate propagandist and the Board at Truthout is highly suspect. Just where is the new Truthout Board of Directors coming from?... and who is funding their salaries... directly or indirectly.

You guys who keep crying about fair trade and "so called cheaper labor" are incredibly delusional. You know how poor countries like China and India really are? There will ALWAYS be much cheaper labor in the developing world. This isn't some kind of make believe trick.

As for Donald Trump, he's a moron. All you whiners who cry about poor quality cheap crap from China--really? Name the product. You just like shooting your fat mouth off. The truth is, they have a ton of highly skilled workers who work hard and don't cry and complain all the time. If the product was so bad, people wouldn't buy it. Who in the right mind says to themselves, "these socks are crap, but since it's cheap, I'll buy it anyway"?