Pretty humorous how monetary cranks rant nonstop about the fed printing money being theft and about how we're turning into Zimbabwe and then goddarn it Paul Krugman was right and there's no hyperinflation and to top it all off your Ayn Rand bucks start suffering "downward pressure" due to all the Ayn Rand buck printing...
Krugman was right, but I remember during the Bush years, he was predicting inflation caused by the deficits that Bush created. He's a really smart guy but can be pretty partisan.
That said, at least he adjusted his opinion in the face of evidence -- Econ 101 says we should be seeing inflation and instead we're seeing near-deflation while the Fed is literally printing as much money as they can politically get away with. The monetary cranks keep telling us we're going to see it 'any minute now', because they can't abandon their theories in the face of evidence -- and yes, eventually some inflation will happen at some point, but it's hard to say that'll have made the cranks correct.
I will say that deficits increasing interest rates in a time of expansion and deficits and QE not increasing interest rates during a recession when the taylor rule is at -5% or so[1] are not exactly the same thing.
That's exactly the column I was thinking of, I specifically remember the mortgage reference. Thanks.
And I agree on your distinction there, and the historical record bears it out, with inflation rising from 2003-2007 and then near-deflation from 2008 onwards. Thank god we didn't listen to the fiscal hawks in 2009, most of whom were just trying to score political points and make things harder for Obama anyways. Could have been a deflationary spiral similar to what happened to 2000s Japan or 1930s US.
Hm, I think I just bumped Krugman up another notch in my head -- that 2003 article looks a lot less partisan if you look at it in the context of 2003-2008 rather than 2008-2014.
