Not dismal, but tricky

I think I mentioned recently that I took an (one) economics course in college. Last night was one of the many times that I have wished I delved a little deeper into the subject.

I went to hear Paul Krugman, who won the Nobel Prize in economics last year, writes a column twice a week for The Times and is an economics prof at Princeton, deliver a talk at SUNY Albany on our current economic woes.

I read him a lot and know him as maybe the most widely read liberal economist in the country. "Liberal'' in this context seems to mean looking favorably on government intervention in the economy. You may have noticed we have done a lot of that lately.

He was glib and articulate, as befits a man of his position, as he painted a grim picture of the current situation, saying that job growth is likely to lag for years. He was also smart enough to answer a couple of questions (what did he think of the current state of the New York government and why is Chile, where is scheduled to speak later this month, thriving?) by saying he didn't know enough about the topics to give a good answer. You have to admire and trust someone who knows what they don't know.

Still, with my limited knowledge of the subject, he did say a couple of things that troubled me.

First, he thinks the feds should have given more money to the states to offset their lagging revenue. Since one thing I do know about is state-government spending, I have my doubts that they are best equipped to spend it wisely. He also said in his column on Friday that the feds should come up with more aid to local schools. But I think spending what we already do more wisely is the more prudent course. (This is from somebody who pays more than 5 grand a year in school property taxes)

Second, he said essentially that fears about the federal debt (something over $11.5 trillion now, up a record $1.2 trillion last year, more than double the size of the previous record increase, which was the year before) are overblown, since much of the money comes back to the government in tax revenue. But he couldn't quantify how much. That seems risky to me.

But what do I know? Back when I took economics, the national debt was measured in mere billions and banks were so tightly regulated that all they did was collect deposits and make loans to homeowners and businesses, who were usually subject to stiff reviews of their ability to pay the money back.

It's a different world now.