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Krugman Suggests Germany Create A Bubble To Save The Euro

Paul Krugman is now suggesting that Germany needs a bubble to save the Euro. He wrote in response to the current problems in Europe:

"What could turn this dangerous situation around? The answer is fairly clear: policy makers would have to (a) do something to bring southern Europe’s borrowing costs down and (b) give Europe’s debtors the same kind of opportunity to export their way out of trouble that Germany received during the good years — that is, create a boom in Germany that mirrors the boom in southern Europe between 1999 and 2007."

So now Krugman is saying that Europe will be saved if the European Central Bank does in Germany the same thing it did in Greece, Ireland, Spain, and Portugal.

What happens when the German bubble collapses? 

When will people learn that creating new bubbles to fix old ones doesn't work? Did Paul Krugman already forget about the NASDAQ bubble or the housing bubble? Remember when Krugman called for Greenspan to create a housing bubble to fix the problems caused by the collapse of the NASDAQ bubble?

"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." - Paul Krugman August 2, 2002

When will people stop listening to this Keynesian non-sense and start listening to the people that have successfully predicted these problems and gave clear solutions on how to fix the problem?

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