Paul Krugman: Even if we don’t and won’t have a job-creation policy, can’t we count on the natural recuperative powers of the private sector, [which] usually does find reasons to start spending again? [Actually] investment in equipment and software is already well above pre-recession levels; housing is trying to stage a comeback. So yes, the economy is showing some signs of healing itself. But that healing process won’t go very far if policy makers stomp on it, in particular by raising interest rates. And financial markets are, in effect, betting that the Fed is going to offer another such example. 30-year mortgage rates have risen by a third since the Fed started talking about relaxing its efforts about two months ago.
Posted on: Mon, 08 Jul 2013 07:18:27 +0000
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