Economist Hans Hermann-Hoppe had the above to say about how to deal with the nonsense that Paul Krugman spews forth. Krugman had the following response:
Some further thoughts inspired by the welcome hatred of the usual suspects toward yours truly. One quite common statement among the Austrianish horde is something along the lines of “It’s ridiculous to imagine, as Krugman does, that you can create real wealth by printing more pieces of paper.”
Well, it may be ridiculous, but it’s also true, under certain conditions — namely, when the economy is suffering from inadequate demand.
So, there you have it. Paul Krugman thinks that printing more money can actually create wealth. He goes on from there in his blog post with some vain effort to argue his case, but there’s no point in dissecting his argument. You don’t have to be a Nobel Prize winning economist in order to understand that simply printing pieces of paper cannot make a society wealthier. All you need is some basic common sense.