Paul Krugman Government Quotations

We know that advanced economies with stable governments that borrow in their own currency are capable of running up very high levels of debt without crisis.

These days, however, the main problem comes from the right - from conservatives who, unlike most economists, really do think that the free market is always right-to such an extent that they refuse to believe even the most overwhelming scientific evidence if it seems to suggest a justification for government action.

Raising the minimum wage and lowering the barriers to union organization would carry a trade-off - higher unemployment. A better idea is to have the government subsidize low-wage employment. The earned-income tax credit for low-income workers - which has been the object of proposed cuts by both President Clinton and congressional Republicans - has been a positive step in this direction.

Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.

Governments do not necessarily act in the national interest, especially when making detailed microeconomic interventions. Instead, they are influenced by interest group pressures. The kinds of interventions that new trade theory suggests can raise national income will typically raise the welfare of small, fortunate groups by large amounts, while imposing costs on larger, more diffuse groups.

[D]ebt increases that didn't arise either from war or from extraordinary financial crisis are entirely associated with hard-line conservative governments.

The federal government is basically an insurance company with an army.

What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.

It’s not about the budget; it’s about the power...So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.