Paulson said the Nobel laureate keep a close eye bailout for the cash-for-paper.

<P> "His program in my opinion nothing" </ P> <P> 10 12, Princeton University economics and international affairs professor Paul Krugman (Paul Krugman) in the .private blog bluntly accused the United States Treasury Secretary Henry Paulson $ 700,000,000,000 bailout. .</ P> <P> just a day later, Krugman was awarded the Royal Swedish Academy of Sciences, Nobel Prize in Economics in 2008, he and Paulson differences of opinion suddenly become the topic of world attention. .</ P> <P> no doubt that the new Nobel Prize winners and U.S. Treasury Department is not set. .</ P> <P> even in the October 15 update the blog, the 55-year-old Krugman altogether childish to reveal the Laodi Paulson: "I know, Paulson in 1972 and 1973 actually .Nixon had been a consultant 约翰亚列舒曼 (John Ehrlichman), Assistant ... ... If you have experienced the Watergate, you should know what I mean. "</ P> <P> Yalieshuman accused in 1974 .the "Watergate" investigation obstruction of justice, conspiracy and perjury and was jailed for 18 months, after Paulson left Goldman Sachs in Chicago to Washington to serve the Department. .</ P> <P> "cash-for-paper" </ P> <P> Although the U.S. $ 700,000,000,000 bailout plan is passed by Congress, but this program puts Krugman described as "cash-for- .waste paper. " .</ P> <P> "Some people have called the Paulson bill proposed resolution authorizing the use of financial power (the Authorization for Use of Financial Force). It is notorious to follow the resolution authorizing the use of force (the Authorization for .Use of Military Force), precisely because of this motion, the Bush administration to invade Iraq a matter of course. "12, Paul Krugman in the called" cash-for-paper, "the blog writes. .</ P> <P> him since the financial crisis, Paulson led a series of moves made veiled criticisms. .</ P> <P> "Some people say that we simply believe that Henry Paulson on the line, because he was smart enough to know what they are doing. This is only half right: Henry Paulson is very smart. But from the past .year and a half performance, what can that he is very clear what they are doing? this time, Mr. Paulson has repeatedly emphasized only the financial crisis 'in manageable', then, we get .thing is a series of failures. So, he will only stop-gap measures, and others is no different. "</ P> <P> addition to Paulson, I vigorously criticized, Krugman also proposed .its own financial crisis, "four-step method", used to prove that Paulson plan will not work: </ P> <P> first step, the housing bubble burst led to loan defaults and a sudden increase in foreclosures, .This results in mortgage bond prices plunging. .</ P> <P> the second step, the loss of so many financial institutions into a situation of capital shortage - and liabilities than assets, very little - in view of each body in the bubble years have accumulated a huge amount of debt, and now .This problem is especially serious. .</ P> <P> third step, the financial institution's assets / liabilities ratio is very low, and they have also unwilling to provide the credit needed for economic development. .(Http://finance.) </ P> <P> fourth step, including the loans by selling assets, including mortgage bonds, financial institutions try to repay its debt, but this has led to falling prices, leaving their financial situation .risk. .This vicious circle is what people call the "paradox of deleveraging." .</ P> <P>.