| Mr Khan said: Given America's reliance on the consumption sector, Keynesian ideas are all the more important: people with less income buy things, whereas excess income is saved or invested. |
Isn't that a problem? Japan has traditionally been a nation of savers (though that's less the case now) and while it's caused some problems (which their government exacerbated in masterful fashion), I think it's still far preferable to being a nation of overconsumers. It's peculiar to me that people only seem to fret about consumption in that environmentalist "the Earth is running out of resources" way, but never really in a "is an economy that's based on people consuming more than they produce really anything more than a giant bubble?" way.
I don't agree with Keynesian theory, but Krugman was a lot saner before Bush caused him to flip his lid. From time to time I like to amuse myself by comparing his writings as an economist in the '90s to his screeds in the Times today. I even made a drinking game out of it: I read one of his articles and then I drink until I pass out.
