Slope is very flat — a year or two of overshoot will not produce a lot of inflation. In other words, chill about the size of the relief plan 4/
Paul Krugman Wed 10 Feb 2021 20:32

Quick and dirty comparison of CBO "output gaps" with inflation. Suggests that economy can run maybe 1.5% above "full employment" with only 2% inflation, and ... 3/ https://t.co/Nkj9u4FXuz
Paul Krugman Wed 10 Feb 2021 20:32

Also important to realize that the data suggest that "fuell employment" as conventionally estimated ... isn't 2/
Paul Krugman Wed 10 Feb 2021 20:32

RT @StevenTDennis: Ron Johnson warning Neera Tanden against overheating the economy... Quoting Larry Summers.
Paul Krugman Wed 10 Feb 2021 17:27

RT @TBPInvictus: Followers may recall one of the charts I created last year, documenting Trump's lies about Covid "progress" against a moun…
Paul Krugman Wed 10 Feb 2021 15:37

RT @arindube: Experts who think the relief package is too big probably need to make their case to the general public more effectively. Othe…
Paul Krugman Wed 10 Feb 2021 14:42

Biden policy, explained https://t.co/Te6U47jM1u
Paul Krugman Wed 10 Feb 2021 12:47

RT @davidfrum: Rand Paul goes unmasked to make it clear that for him, disregard for others is not merely a matter of ideology, but a lived…
Paul Krugman Wed 10 Feb 2021 12:32

RT @MikaelThalen: A lawyer using Zoom had to let a judge know that he wasn’t a cat after inadvertently activating a face filter https://t.c…
Paul Krugman Tue 09 Feb 2021 19:59

RT @nytopinion: "Biden and company appear to have learned that caution coming out of the gate doesn’t store up political capital to do more…
Paul Krugman Tue 09 Feb 2021 01:08

RT @delong: DeLongTODAY: Nudging Ourselves Toward Full Employment... I confess that I do not understand worries that Biden's $1.9 trillion…
Paul Krugman Mon 08 Feb 2021 14:33

RT @henryfarrell: One way of interpreting this is that many political journalists know very little (and care relatively little) about polic…
Paul Krugman Mon 08 Feb 2021 13:47

Another is that GOP attempts to brand anything Dems propose as socialism aren't working. The public wants vigorous action, and is effectively giving Biden a mandate to go big 3/
Paul Krugman Mon 08 Feb 2021 13:32

This seems relevant in a couple of ways. One is that complaints that Biden isn't delivering on "unity" are strange: his policies command very widespread support, it's basically only Republican activists — who cannot be appeased — opposed to their substance 2/
Paul Krugman Mon 08 Feb 2021 13:27

Something I don't think is reflected in news coverage: Biden's aggressive response to Covid has overwhelming approval — much higher than Obama's stimulus a dozen years ago 1/ https://t.co/RXzXcGeXp3
Paul Krugman Mon 08 Feb 2021 13:27

As Republicans try to blame *Democrats* for Jan.6, I find myself recalling a passage from Abraham Lincoln's Cooper Union address (given at a time when, unlike today, Republicans were against slavery) https://t.co/pbTd4ju06K
Paul Krugman Sun 07 Feb 2021 19:37

So go big. The risks of undershooting are too severe to do anything else 4/
Paul Krugman Sun 07 Feb 2021 17:57

And the idea that we need to save fiscal ammunition for future programs is completely backwards. Remember 2009! The constraint is political, not financial; what we need is a program that delivers tangible benefits to voters, showing them that govt can do good. 3/
Paul Krugman Sun 07 Feb 2021 17:57

Fear of inflation are greatly exaggerated: the economy can probably run hotter than CBO thinks, the multipliers on a lot of the spending probably aren't that high, and the Fed is well able to contain inflation if it becomes a problem 2/
Paul Krugman Sun 07 Feb 2021 17:57

I often groan over the carefully constructed acronyms that rule these days — the CARES act was great, the HEROES act would have been great, but the names were a bit ... tacky. But better than than mess up good policy ideas with accidental humor 3/
Paul Krugman Sat 06 Feb 2021 20:41

But the 70s were a golden age for bad acronyms; Nixon's Committee to Reelect the President, or CREEP; Ford's Council on Wage and Price Stability (everyone I knew pronounced COWPS "cowpiss") 2/
Paul Krugman Sat 06 Feb 2021 20:41

We'll see if we really do overheat. But the idea that this is a gratuitously large plan confuses the goals of the policy with the macroeconomics of getting it done 8/
Paul Krugman Sat 06 Feb 2021 20:16

So if you're worried about overheating, you shouldn't focus on the notion that the plan is too big; your real concern is that, like fighting a war, doing what needs to be done may be inflationary. And the answer in that case is not to do less, but to limit the inflation 7/
Paul Krugman Sat 06 Feb 2021 20:16

In particular, most of those "stimulus checks" will probably be saved, and aside from the fact that state/local aid is largely a way to head off fiscal contraction, any excess will probably be banked. 6/
Paul Krugman Sat 06 Feb 2021 20:11

Now, wartime spending isn't about stimulus, but is nonetheless stimulative, and overheating can be a real concern. But the Fed can contain inflation; and in any case the less-essential parts of the plan probably have low multipliers 5/
Paul Krugman Sat 06 Feb 2021 20:11