My main man Paul Krugman has done it again. After chastizing America for the last year for its profligate spending ways based on mountains of debt, he now says we should not worry about the Feds’ debt. In fact we should welcome it growing higher. His point is that President Obama’s campaign to get us out of the economic slump with massive injections of Fed funds is needed.

Welcome to the club Paul. I have steadily applauded massive injections of Fed funds into our ailing economy since President Bush put in place the TARP plan last year. I have praised Paulson, Bernanke, and Geithner for being the right people at the right time. I have also commented ad nauseum on the massive stake acquired by the Feds in the private sector via these huge injections of Fed funds.

More importantly, I have clearly demonstrated that all of these injections have come from borrowed funds, i.e. massive deficit spending by the Feds has saved our economy. Last March I discussed the size of the current Federal deficit and the outstanding National Debt showing that the USA ranked number 28 among all the developed countires of the world in the ratio of its national debt to GDP (gross domestic product). Thus we had a long way to go to reach the level held by Japan and Germany.

I also calculated that at the current interest rates paid by the Feds for borrowed funds, we could probably sustain a national debt of $28 trillion. The ccurrent national debt is about $12 trillion. The Obama administration now says that our Federal deficit should add about $9 trillion to the national debt over the next ten years. So if my calculations are correct, we still have alot of room for government action.

I am glad to see Krugman finally see the light. But do wish to point out that he is way behind the “Power Curve.”