Economist Paul Krugman Cautions Fed Against Raising Rates

The transcript discusses the potential impacts of Donald Trump's fiscal policies, including tax cuts and infrastructure spending. It evaluates the effectiveness of fiscal stimulus in the current economic climate, considering near-full employment and low interest rates. The discussion also covers the Dodd-Frank Act's impact on small business lending, arguing there's little evidence it hinders the economy. Finally, the transcript examines the Federal Reserve's interest rate policies, questioning the timing of rate hikes given current inflation and employment levels.

What is one potential positive outcome of Trump's fiscal policies according to the economist?

• Higher inflation rates

• Decreased consumer spending

• Increased government debt

• More investment and job creation

Why does the economist argue for fiscal stimulus despite being close to full employment?

• To decrease interest rates

• To reduce government spending

• As insurance against a potential downturn

• To increase inflation

What criticism does the economist have about the proposed infrastructure plans?

• They are too expensive

• They focus too much on rural areas

• They will increase taxes significantly

• They are disguised privatization schemes

What is the economist's view on the impact of Dodd-Frank regulations?

• They should be completely removed

• They are irrelevant to small businesses

• They have been beneficial

• They are holding back the economy

What is the economist's stance on the Federal Reserve's interest rate hikes?

• They will boost consumer confidence

• They will lead to higher unemployment

• They are premature given the current economic conditions

• They are necessary to control inflation