CONFUSION: HIGH PUBLIC DEBT LEVELS AND OTHER SOURCES OF RISK IN TODAY’S MACROECONOMIC ENVIRONMENT by DeLong

I have to say it is admirable the way DeLong admits how he was wrong and how he goes through his thinking about the data and history of recent macroeconomics, his field of focus.

He forgets to mention that the Fed is paying the banks IOER, so I don't fear a financial crisis there. The bank system is essentially a quasi-public-private venture like Fannie/Freddie. Obama should do what he did with the auto companies and sort them out. He should privatize Citigroup, but then he just nominated a guy from Citigroup to be US Trade Representative. I wouldn't be surprised to learn that Citi is an arm of the CIA like USAID.


The Confidence Fairy, The Expectations Imp, and the Rate-Hike Obsession by Krugman