Loading ...Krugman and Bernanke are walking down the street and see a pile of dog crap. Bernanke says “I’ll give you twenty thousand dollars to eat that pile of crap.” Krugman does it, gets paid, and they keep walking. After a while they see another pile of crap on the road. Seeing an opportunity for revenge, Krugman says “Tell you what, I’ll give YOU twenty grand to eat that pile of crap.” Bernanke does it, Krugman gives him back the money, and they keep walking. After a while Bernanke says “I’m feeling pretty sick. We both ate crap and neither of us is any richer.” Krugman answers “You’re missing the bigger picture. We’ve increased GDP by forty thousand dollars and created two jobs.”
the dog, the only producer in the scenario, gets nothing. keynes would be proud.