Krugman: This Looks Like a Permanent Depression
Evidence suggests economy may never fully recover
By Evann Gastaldo, Newser Staff
Posted Nov 18, 2013 12:19 PM CST
Updated Nov 18, 2013 1:40 PM CST
In this Thursday, April 11, 2013 photo, people wait in line before the Dr. King Career Fair at the Empire State Plaza Convention Center in Albany, NY.   (AP Photo/Mike Groll)

(Newser) – When it comes to the economy, you hear a lot of talk about "exit strategies," with monetary officials resigned to the fact that, for now, "credit must be easy and interest rates low"—just until the US gets back on its feet. "But what if the world we’ve been living in for the past five years is the new normal?" writes Paul Krugman in the New York Times. Increasingly, economists are starting to think we may be in a persistent slump; Larry Summers himself recently made the case at a major IMF conference.

There's mounds of evidence that Summers is right, including the fact that though the financial crisis that launched us into the "Great Recession" is long over, the economy is still in the dumps. And that even during the huge housing and debt bubble, with spending up, the economy wasn't doing all that great. This could be thanks to slowing population growth. "The evidence suggests that we have become an economy whose normal state is one of mild depression," Krugman writes. It seems likely that "depression rules will apply for a very long time." Click for his full column.

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Nov 29, 2013 7:37 PM CST
I wonder how many permanent, full time, good paying, taxable JOBS would have been created in private industry had the president elected to cut taxes only a FRACTION of the TRILLIONS he has spent on spectacularly unsuccessful programs like cash for clunkers, bailouts for banks & business, solar companies that went bankrupt, the unfinished ACA rollout, shovel ready projects that weren't....
Nov 29, 2013 7:28 PM CST
No, it's not a permanent depression, it's the new "Hope & Change"..
Nov 20, 2013 12:09 AM CST
The answer in simple terms is "THE CONSUMER". Makes no difference which nation they reside in. The last decade has conditioned the CONSUMER to pinch pennies, through job loss, reduced income, higher prices, foreclosures, repossessions and so-on and so-forth. Until consumer confidence is restored worldwide (because we exist in and depend on a world economy) the recovery everyone is hoping for may be out of reach. The only cure for this is money in the Consumer's pocket that they are willing to spend. JOBS, JOBS, JOBS create paychecks that drive economies. Until consumers create demand, there is no need to provide services or manufacture the products they don't purchase