Several Excellent Posts on Krugman Blog

link here to article

Krugman reported on a proposal that would give Americans a choice to take Veteran Administration care as one of their choices for healthcare. He knows that it is politically impossible today but he relishes the idea of conservatives opposing socialized medicine as a free choice (they really love free choice). If American's chose a lower cost plan (VA is lower cost healthcare) that provided the quality of VA care it would be a blow to the conservative mantra that government can't be as good or as efficient as private enterprise.

The Post has reported that Obama will propose the Simpson plan as his alternative to the Ryan plan. Krugman explains why that is a bad idea from his perspective.

The Post also explained in an editorial on the Ryan plan that it would extend to Bush tax cuts to the wealthy. That is true, but it also cuts taxes for the wealthy even further. The additional tax cuts add up to $2.9 trillion. The basis idea of the Ryan plan is to cut taxes for the wealthy that are paid for by cutting government spending on programs that benefit less wealthy Americans. His plan also revives the voodoo economics from the Reagan era. Cutting taxes for the wealthy is supposed to create a boom in the economy. Unemployment drops to historic lows in the Ryan plan. Most economists laugh at this assumption.

There is also a post that explains why the move to the Euro as a common currency in Europe led to some of the problems that we see in Greece, Portugal, Spain etc. The southern economies had been paying a premium to borrow money in their own currencies before the Euro. Interest rates dropped for them to the level of German interest rates after moving to the Euro. This encouraged more borrowing which led to the problems they have today.

There is another post that explains why economics would have been more able to deal with our financial crisis and recession if it had used the economics of a previous generation that was more interested in understanding how things really worked than it was in building elegant mathematical models of the economy based on assumptions of rational maximizing individual behavior rolled up into the macro economy. The assumptions simplified the math but it stripped economics of many ideas that have large impacts on the economy.