Don't Blame Us

[Geee]

American Spectator:

When it comes to the weakness of our current economic "recovery" (a term we must use loosely given unemployment only 1% lower than at its worst), liberals are determined to blame anyone other than the Obama Administration, using arguments both false and reprehensible.
Keynesian-in-Chief Paul Krugman, in his latest conspiracy-under-every-rock article for the New York Times, argues that "rentiers" who have own large quantities of U.S. government bonds (which is to say who have done Americans the favor of loaning cheap money to our government) benefit from the low interest rates that usually accompany a weak economy.

Therefore, according to Krugman, this "Pain Caucus" works to "protect the interests of creditors, no matter the cost." One would think that a Nobel Prize-winning economist (though Nobel's shine has lost some luster given its awards to Yasser Arafat, Al Gore, and Barack "maybe I'll earn this one day" Obama) would know better than to offer such claptrap. Or maybe he does know better but assumes -- probably correctly -- that most of his readers don't.

Let's consider whether any among the large holders of our federal debt would actually favor persistently very low interest rates -- and keep in mind that very low long-term rates generally require investor expectations of economic growth too weak to cause inflation, and perhaps weak enough to allow deflation.