Thursday, August 6, 2009

Christina Romer Stagflation Denier

In a speech, today, before the Economic Club of Washington, Christina Romer, chairman of the President's Council of Economic Advisers, said that

Inflation doesn't just come from nowhere. It comes from an economy overheating. And we are so far from overheating I think we have a long time before we really have to worry about inflation.
A model based on "overheating" of the economy as the cause of inflation, simply denies stagflation--a period, such as in the late 1970's, when the economy was in recession and inflation was soaring.

She also established her Keynesian credentials by stating that the $787-billion U.S. stimulus program was stabilizing the economy. In typical Keynesian fashion, she did not discuss from where money will be withdrawn from the economy to pay for the stimulus package.

She did say that spending under the stimulus program should be roughly $100 billion in each of the next five quarters.


  1. Wenzel,

    Hehe, oh Robert, you're so stupid... the money is coming from those idiot Chinese schmucks, of course! Don't you get it, Robert? It doesn't have to come from our economy. We really can have our cake and eat it, too.

    Sure is good being a citizen in god's chosen country, where the sun always shines (at least here on the West Coast) and the credit always flows (not so much here on the West Coast anymore)...

  2. Check this out: