More or less, income will increase...

Article;
Hang-ups of the heterodox vaguely wonkish.

Comment;

Why Krugman forgets that economies like Japan, Europe, and the US are trying to ward-off deflation, they are not fighting with falling wages, directly, although, indirectly, they are trying to push income and wages which will infuse demand in the economy to consume the inventories, sales are down consumer-spending is low, employment has gone down, interest rates, the price of capital, are zero but wages, the price of labor, has become stagnant, low interest rate means we can now buy more labor, labor is in plenty and capital is cheap… but demand is low due to debt-hangover… To bring the economy out of this stagnant position we need to increase wages and income so that debt-repayment does not affect consumer-spending. There could be two possible paths of recovery as far as growth rate of the economy is in focus; either we increase real wages and income or increase nominal income… Since the economy is going through an over-debt period, it is a major concern. We need to weigh down the trade-offs required for the above two paths… I think the monetary policy is potent to achieve these two… because by manipulating interest rate up monetary-policy affect real income and wages by reducing the price-level, they go up… nominal income is affected by lower interest rates, demand goes-up, incomes and wages go up… By going for rise in real-income by lowering prices, Krugman says, is bad for debt, but when income is increasing how it can be bad for debt, I think this fear is baseless. If income is increasing, either, nominal or real, where is the difference ( ?) income is increasing after all, income will go up and it will be easy to pay for debt. At a material level there is no difference, demand will go up… with only difference regarding the value of debt… but not everybody is an economist and no one cares for real interest rate, people not even know the difference between real and nominal interest rates. INDIA is a good example how real interest rates increase investment, real interest rates in INDIA are negative and growth-rate is slowing. However, in both ways income increase and when income will go up debt will go down, too, when interest rates are already zero… General Public does not bother about real interest rates…Apart from this, inflation-targeting is used to reduce real interest rates and to bring the economy out of liquidity trap. We need to reinforce the expectation of a price rise by the same (inflation targeting). Without monetary policy the public is expecting prices to go down because of liquidity-trap, people accumulate reserves, fewer loans will be created, and less demand will be created, prices will go down. Any ways, liquidity-trap is normally attributed to ultra-low interest rates…  Lower prices I think are good for debt repayment…