But it would be better for almost everyone, the story goes, if governments were to issue more debt, investing the proceeds in much-needed infrastructure even while providing the private sector with the collateral it needs to function.

There's the rub. Banks will not lend to small businesses, I know this first hand. "We are not in that business." They loan money (which thy admit is from the Fed) to mortgages, cars, student debt and credit cards and any Ponzi scheme that they can find. In essence government debt is converted to our debt and it lowers our standard of living.

The basic flaw in Krugman's philosophy is that unconstrained Capitalism doesn't work. If your goal is to create small businesses and educate your people, well, put your money there directly. The banks have been told to invest some of their Fed money into business, but they just can't bring themselves to do it. On top of this venture capitalists are not venture anymore. They want to invest, or buy established companies of a minimum of $10M revenue, with the goal of complete control. The net result is that the middle class is hogtied as consumers and the cost of business in the US is exorbitant. These are serious structural defects, which Krugman outright denies. His formula, increased debt without limit, will eventually put the government in the position of not having the resources to address critical problems. If the US were rated fairly as other countries are, we would have a very poor rating and no one would want our bonds. Here's to being the biggest player on the block ... for a few more years.

away from this:

using all that industry they had built for war machines and converting it to other things.

Someone mentioned a coup the other day somewhere around here. I have often thought we've been "silent couped" and that happened on 9/11, when the nation went back on permanent "war" footing. Except this time, a lot of the "enemy" we were fighting was either self-imposed, or invented, all to bring that munitions industry back to the fore.

Fucking monsters. They've taken over everything.

When you give effective legislative veto power to a bunch of mental midgets who think Ayn Rand was brilliant, instead of more accurately considering her to be raving loon with ideas that could only excite a pimply faced, functionally illiterate, teen boy with a serious personality disorder who lacks all social graces, you end up with today's congress. Dysfunctional, inept, corrupt, and led by a man whose economic ideas would destroy the world economy.

Debt is good. Debt builds things.

Here is an example.

Take a medium sized town on one side of a large river. A hospital exists on the other side, and a company is building a new plant that could provide hundreds of good paying jobs. The nearest bridge is 1 hour way.

The town elders have two choices:

A. Save up money in a rainy bridge fund, and when you collected enough, build the bridge.

B. Issue debt in the form of bonds, build the bridge now, get shorter, safer commutes to the hospital, open up the new jobs to the town's people. Charge a toll to pay the bonds.

The increase in productivity (2 hours less commuting time) would more than offset the increased debt.

And with teabuggerers in office, how long do you think some rainy day bridge fund would last? They'd just cut taxes for the rich and raid the fund.

The only kind of debt instrument I would buy would be sovereign debt. Preferably US or German sovereign debt. I would not be adverse to other countries' debt depending on their bond ratings. Even if I had to pay to hold it, which is happening right now. We have negative interest sovereign debt in many European countries. This is new economic territory and it frightens me.