Paul Krugman

Advanced countries with stable governments that borrow on their own currency just have far more fiscal space than most people tend to imagine.

Yeah, well, although I have to say that the reason that Liz Truss lost the race with a head of lettuce as to who would survive longer

There was, I think the UK economists were calling it the moron premium.

I mean, it wasn't simply that her plans looked fiscally irresponsible.

They looked stupid.

And now, of course, stupidity always comes along.

But I don't think that was a fair test, really, of the sustainable level of debt.

I mean, the Fed is, look, they have

as they should, a dual mandate.

They're supposed to achieve full employment or sustainably full employment, and they're supposed to have low inflation.

And there's a target of 2%

which is rather arbitrary and is one of the few things in the world that you can really blame on New Zealand, which is a whole story.

But something like that, inflation, basically keep inflation low enough that people are not constantly thinking about it.

The right level of inflation is low enough so that it does not become a major source of, major use of cognitive energy.

And as full employment as you can manage.

And that's where they will set, that's what will determine where they set interest rates.

They will judge it wrong sometimes because they are, actually, the dirty little secret of all this stuff is that Jerome Powell has no, essentially no information that

anybody who knows how to use, you know, knows how to use FRED, the Federal Reserve database doesn't have.

And so they'll get along.

But I don't think now the labor market disruption issue, not really.