Paul Krugman once again is worshiping at the altar of inflation. Yes, the man who praises FDR's New Deal (with its double-digit unemployment) and who demands the same for this country today, has come out front-and-center for the Fed to inflate its way out of this mess:

Actually, Greg has arrived at the same conclusion I did more than a decade ago, when I tried to model the problems then facing Japan, and now facing us. As I pointed out back then, the essence of a liquidity trap is that the real interest rate is too high, even when the nominal rate is zero. So the theoretically “correct” answer, if you can swing it, is to create expected inflation, pushing the real rate down.

As I put it, perhaps too glibly, the central bank needed to “credibly promise to be irresponsible.”

The thing is, at the time my analysis was widely treated as somehow wild and crazy, even though it came straight out of an extremely buttoned-down theoretical model. Japan was supposed to suffer for its sins, not inflate its way out of them. I wonder if similar proposals for the United States will receive the same reception.

There is only one small problem with Krugman's analysis: Krugman's advice to the Japanese government only made things worse. At the end of the "Lost Decade," there were public works white elephants, massive debt, and an economy with zombie firms.

So, Krugman apparently wants a trifecta. The New Deal, Japan's "Lost Decade," and now the "New" New Deal: empower the state and impoverish people. He is right on one thing: He is demanding that the government be irresponsible, but contrary to Krugman's statist religion, irresponsibility only makes things worse.