The Merchant of Gloom

He's right. Our political and economic leaders don't have the courage to inflict short term gain for long term benefit, So we'll have extremely poor economic performance for a minimum of a few years up to one or two decades, all because the gov't won't let the normal processes of asset write-offs and balance sheet contraction to run its course. The analogy would be forest fires. Do you permit small fires that allow the forest to regenerate or do you put everyone out and be left with a sick forest that's always a moment away from burning up in one shot.

Steve Keen thinks we have too much debt and Paul Krugman thinks we need more. Europe is proof that too much debt is dangerous and austerity the answer.

guns and butter

Several of his themes are interesting
The level of debt has increased to unsustainable scales.
Banks are insolvent.
Debt used to finance working capital is good, debt that gambles on asset prices is bad and parastic.
Banks make money by creating debt.

The word mortgage is Latin for death contract something we should not blindly take on.

"Europe is proof that too much debt is dangerous and austerity the answer."

No, austerity is not the answer. Austerity has destroyed the British economy:

http://www.newyorker.com/online/blogs/johncassidy/2011/11/the-message-from-britain-a-failed-experiment-in-austerity-policies.html

"The independent Office of Budget Responsibility, which Osborne set up on taking office last year, lowered its forecast for G.D.P. growth in 2012 from 2.5 per cent to just 0.7 per cent, dryly commenting that “the probability of a much worse outcome … is greater than the probability of a much better one.” Some economists think the double-dip recession has already begun. Earlier this week, the Organisation for Economic Co-operation and Development said the British economy would shrink in the fourth quarter of this year and the first quarter of next year.

Just eighteen months ago, when the Conservative-Liberal coalition came to power, the British economy was growing at an annual rate of more than four per cent, and appeared to be recovering surprising strongly from a deep recession that followed the financial crisis of 2008."

Countires that imposed austerity have higher unemployment and larger deficits. Austerity has failed.

Why do we need to spend billions on a presidential campaign election next year when we can just cut out the middle man and appoint Grover Norquist president?

Why spend millions at all on any campaign?

You are correct, Socialist.

Plus, there is moral hazard with austerity, because it does not punish the banks, which pushed unsustainable levels of cheap debt onto Euro zone countries.

If you want to stop the heroin trade, you don't throw the junkies in jail. You throw the pushers in jail.

The UK, Denmark, Sweden, and Icland can, like the US and Japan, print their own currency. Their central banks can monetize their debts. This is is why these nations can get away with debts to GDP as high or higher than the "troubled" Eurozone nations. Its very simple.

And for the millionth time, Spain had a SURPLUS and a debt to GDP HALF than of Germany in 2007. Debt did not cause Spain's problems. It was a real estate bubble, pure and simple.

This chart shows my point clearly.

http://krugman.blogs.nytimes.com/2011/12/05/no-its-not-the-welfare-state/