Who to listen to

I don't know. But I do know that Paul Krugman was recently rated as the "top prognosticator" by a recent Hamilton University analytical survey (PDF).

The Hamilton students sampled the predictions of 26 individuals who wrote columns in major print media and who appeared on the three major Sunday news shows – Face the Nation, Meet the Press, and This Week – and evaluated the accuracy of 472 predictions made during the 16-month period. They used a scale of 1 to 5 (1 being “will not happen, 5 being “will absolutely happen”) to rate the accuracy of each, and then divided them into three categories: The Good, The Bad, and The Ugly...

The top prognosticators – led by New York Times columnist Paul Krugman – scored above five points and were labeled “Good,” while those scoring between zero and five were “Bad.” Anyone scoring less than zero (which was possible because prognosticators lost points for inaccurate predictions) were put into “The Ugly” category. Syndicated columnist Cal Thomas came up short and scored the lowest of the 26.

Take the survey for what it's worth, but Krugman recently highlighted the dangers of over-leverage, namely it being a harbinger of subsequent financial problems:

When I wrote the first edition of The Return of Depression Economics, I was reacting in large part to the Asian financial crisis, which I thought could presage similarly difficult crises here in America. Sadly, I was right.

But what made Asia so vulnerable then but not so vulnerable now? Even then, the best available stories ... focused on issues of balance sheets and leverage. And it’s now standard to focus on household leverage as a key part of what went wrong in 2008:

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Now if we put this measure beside the equivalent Canadian measure it looks all the more interesting (courtesy theeconomyanalyst.com):

Looking at disposable income isn't quite an apples-apples comparison due to Canada's greater contribution to social services like education and health care. Also the normalization of the scales can add in some debate over the relative peaks. Insofar as the debt-to-disposable-income ratio was brought forward before the GFC by Krugman, a pundit with a proven track record, and comparing the order of magnitude of debts Canadian households are currently carrying, irrespective of some tax policy differences, it should give policymakers some food for thought in the coming year.