More Proof That We Live in the End of Days

No, you are not hallucinating, those hoof falls you hear outside really do belong to the four horsemen of the economic apocalypse. (Say, if you were going to be a horseman of the apocalypse, which one would you be? Personally, I like strife.)

Today's proof that we live in the end of days is outsourced Paul Krugman ...

ZIRP!

That’s zero interest rate policy. And it has arrived. America has turned Japanese.

This is the thing I’ve been afraid of ever since I realized that Japan really was in the dreaded, possibly mythical liquidity trap. You can read my 1998 Brookings Paper on the issue here.

Incidentally, there were a bunch of us at Princeton worrying about the Japan problem in the early years of this decade. I was one; Lars Svensson, currently at Sweden’s Riksbank, was another; a third was a guy named Ben Bernanke. I wonder whatever happened to him?

Seriously, we are in very deep trouble. Getting out of this will require a lot of creativity, and maybe some luck too.