The Actual Problem With The Deficit

Too small. The link at the end of paragraph 3 of the article is also worth a read.

I understand why people have a hard time accepting that the entire public debate on the deficit is premised on a falsehood (actually, many falsehoods), because it is upsetting to think that almost everyone, including every major political figure in Washington, has it wrong.

I also understand why well-educated people with MBAs, or at least an Econ major, for which they paid a lot of money, need to believe that what they were taught was correct. The implicit argument from authority is easily justified when your authority teaches at Harvard, or the like. Especially when you agree with the authority's political views, like I agree with Krugman (mostly).

The simple fact is, the linked article describes the reality of the modern monetary and banking systems. Its premises are all based on facts, not theories, and many, if not all, of the implications are backed up by data. Regardless of where you learned it, if the model that you use to describe things actually describes neither the past nor the present, you may wish to reconsider your model.