Economist Paul Krugman is not worried about the U.S. deficit as much as other people are.
If our economy grows fairly strongly in the next 10 years, we have nothing to worry about, says the author of “End This Depression Now!“
If it doesn’t, Krugman says we can learn from an obscure moment in the economic history of France.
“France, after WWI, came out of the war with a high level of debt, and didn’t really… couldn’t bring itself to make the sacrifices needed to service that debt. So what happened was: the franc depreciated, they had a bout of inflation, which reduced the value of the debt, and then the economy stabilised and actually nothing terrible happened,” said Krugman in an interview with Business Insider editor-in-chief Henry Blodget.
Should we expect a French franc episode for the dollar?
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