Bob Murphy discusses the kernel of truth in the parody of Paul Krugman’s
“destruction boosts the economy” theory (wouldn’t that make Haiti among
the world’s richest countries?); Ron Paul’s plan for gold-backed
currencies to compete with Federal Reserve dollars; how a gold standard
limits the government’s ability to inflate the currency and make wars;
how artificially low interest rates create unsustainable consumption;
the new economic bubble emerging in sovereign debt, where risk and
interest rates remain out of whack; how the US government continues
accumulating debt by leaps and bounds; and why things will get
interesting, in a bad way, when interest rates increase.
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