In a recent blog post, Paul Krugman claims that because the real yield curves for U.S. Government bonds have been negative, we now are in an era of “free money.” So, there should be no limits on government borrowing and spending, right? Krugman says, sarcastically:

But we must slash spending, because there is nothing the federal government can do that has a positive real rate of return, even when you take account of the fact that the workers employed would be doing nothing otherwise.

So, there you have it. The Ultimate Free Lunch. Even though the government is borrowing in record amounts and people like Jim Rogers have pointedly said that the emperor is naked, nonetheless, Krugman and Joe Stiglitz and others continue to push the fantasy that prosperity is around the corner if only — IF ONLY — the government picks up its reckless pace of borrowing-and-spending. And when the economy continues its freefall into depression, Krugman will blame anyone who dissents.