Does Krugman understand that there is both Supply and Demand?
Far from fleeing U.S. debt, investors have continued to pile in, driving interest rates to historical lows. . . .
Beyond that, suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much. For that’s what the “fiscal cliff” — better described as the austerity bomb — is all about: the tax hikes and spending cuts scheduled to kick in at the end of this year are precisely not what we want to see happen in a still-depressed economy. . . .
UPDATE: Michael Tanner has some notes on Krugman here.