After WWII, we had a higher debt-to-GDP ratio than we have now, and we got out of it just fine, says economist Paul Krugman, an author of “End This Depression Now!“
The way to get out of such a situation is through either growth or inflation, and history has shown that inflation is not necessarily a bad thing.
“I remember America when it had a 4% inflation, which was during the second half of the Reagan years, and I don’t remember that as being a dystopian hellhole. I remember that as a country that was actually thinking it was doing OK,” Krugman says.
Another area of our economy that we would have to address some time in the future are entitlements.
“Somewhere, not in the next decade, but somewhere beyond that, we will have a situation that if nothing is done, we will have a serious mismatch between revenue and expenses,” says Krugman.
Watch his full arguments on inflation and entitlements below.
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