Behold, The Anti-Kroog Walks Among Us

For if Paul Krugman has a nemesis, it's Harvard man Niall Ferguson, who's flat out warning that if Obama listens to Krugman and provides any more stimulus, the bond market will implode and throw us into a hyperinflation crisis.

"Is it going to be inflation or is it going to be default. Right now there is no sign of inflation. We have monetary contraction at an alarming rate, and zero inflation in terms of core CPI, so the option of inflating this debt away doesn't seem to be there right now. What you are left with is therefore default. And I think it is a fair debt that US will default at least on the unfunded liabilities of Social Security and Medicare at some point in the foreseeable future. What the Greeks discovered you are fine until you are not fine with the bond market and if you have a non-credible fiscal strategy of borrowing a $1 trillion a year for the rest of time, never ever again running a balanced budget, at some point the markets are going to get spooked, and I think that point is nearer than Paul Krugman believes. Nothing would spook the markets more than for Paul Krugman's advice to be accepted by the Obama administration. That might well be the trigger." 

In other words, we can't afford stimulus because it'll hurt the bond traders.  We'll go straight from deflation to hyperinflation you see...sure that's possible, but if we do nothing, then that deflationary spiral will only get worse...and that's assured.

We're more scared of possible inflation than we are actual occurring deflation...which is a lot like worrying about the water damage to your house when it's engulfed in flames and saying "Well we can't spray water on it, it might ruin the carpeting!"

This is what passes for conservative economics these days.  I mean, just because Paul Krugman's been right about the last decade or so doesn't mean he's right now...