‘Tis the season for miracles, so perhaps we shouldn’t be surprised to find even tenured economists believing in them. Here’s my favorite, from Berkeley blogger Brad DeLong: a central bank can buy as much debt as it wants at whatever price it wants, and any losses it takes on its portfolio just disappear! Really. The European Central Bank “taking losses on its PIIGS bonds,” he writes, “is a nothingburger.”
Yes, a nothingburger! And those Europeans still seem to think that Portugal, Italy, Ireland, Greece, and Spain have a debt problem. What idiots. Don’t they know about Draghi Claus?
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