The Keynesian clown hit parade just keeps on rolling. Leo Kolivakis at Pension Pulse is the latest to put on the clown hat for The Third Depression?

Some economists are worried about the push to slash deficits too early. In his op-ed piece in the NYT, Paul Krugman goes as far as calling for The Third Depression.



I also fear that policymakers are making a major mistake by moving so aggressively to cut deficits at a time when the global economy remains fragile. If you go back in history and look at all the major recessions, they were preceded by major policy mistakes. Either the Fed started raising rates too aggressively, or governments slashed spending too aggressively, or both.

The Cause of Depressions

What causes depressions is an unsustainable runup in credit and debt that precedes it, NOT a failure to go deeper in debt.

Three Examples of Total Rubbish

People who think crack addicts can smoke crack to cure their addiction

Alcoholics who think they can drink their way out of alcoholism

Debt junkies (and Keynesian clowns) who think one can spend one's way out of a spending problem

Depression is Well Earned