In a recent article about the Great Depression, it's parallels to our current situation, and what should be done about it, Mr. Krugman made a few assertions that don’t bode well for the state of independent academics or our country in general. One would think that an institution such as Princeton would want to be represented by forward thinking individuals, not just shills for failed public policy. Does anyone still consider Krugman an economist? Or just a sideshow player for the liberal agenda? Is he really still hawking Keynesian theories as prescriptions for economic success? Seriously, this is what kids are learning at Princeton? If this is the highest education available, no wonder the country is in a death spiral.
The points Krugman attempted to assert, in his typical holier than thou tone, were not just childishly wrong, but completely at odds with each other. And it’s not just Krugman, I have read similar drivel from many liberal pundits. The points are: The stimulus failed because it wasn’t big enough. And Without a great war to force the spending needed, we will wallow in depression without a foreseeable end. OK, lets look at those two statements. Just real quick. They’re so ignorant that they don’t deserve much time.
Stimulus wasn’t big enough? OK, Keynes, haven’t you wreaked enough havoc on the world yet? Still haven’t brought it down completely, eh? The three biggest expenses of the US government (that is, the US taxpayer), in order from largest to smallest (smallest, in a trillion dollar sort of way) are:1. Health and Human Services
2. Miltary spending
3. Interest on our national debt.
The annual interest on our debt is greater than the annual budgets for the departments of education, veteran affairs, agriculture, and NASA, combined. You could actually throw in a few more government programs if you wanted to get really close.
So, are we to assume that even more interest payments would allow us to fund these other programs in the long run? Or just through the next election cycle?
The whole lie of Keynesian economics is in the “multiplier.” We all know the claim: a dollar actually equals a dollar sixty if the government spends it, whereas it is only a dollar in the private sector. This is the most ridiculous assertion one could make about the realities of economics. How much does it cost for the private entity to calculate how much to give the government? How much does it cost for three dozen bureaucracies to process that dollar? How much is the interest on that dollar if it wasn’t a tax dollar? How much do the politicians that beg for that dollar take for themselves to fly around, wine and dine their favored constituents, and campaign for re-election? (Bush and Obama are responsible for millions of our dollars going to their own political agendas while threatening to lay off fire fighters, teachers and police!)
A dollar doesn’t equal a dollar sixty more, it probably costs a dollar sixty for the government to collect a dollar. Anyone calling themselves an economist that still purports some kind of Keynesian multiplier as a solution must in some way be on the government coat tail.
The only reason true economics, Austrian Economics, is ignored in political circles, is because it is too realistic, and doesn’t allow for bully pulpit promises of how the government can help, if only we give them more of our money.
The second statement Krugman made that caught my attention, and I’ll be even quicker on this one, was regarding the need of a great war to bring us out of the doldrums.
I don’t know if the guy is just truly an idiot, or if he just didn’t read his own argument, or if he thinks his readers are such idiots that they can’t connect two dots.
When faced with accusations of overspending, the current administration and its supporters very quickly, and rightly, point out the un-paid-for spending of the Bush administration as some sort of salve for why it’s OK that Obama has tripled that amount. Health care, for example, they say is a worthy reason for unsustainable debt, but ‘Bush’s Wars’ were not. Obama trumpets as often as he can that the real reason we are in this mess was because of Republican’s relentless spending on War. - Did he say, War? - You mean War like the kind Krugman wants to help us out of Depression 2.0? How can war simultaneously be the reason for our problems and the solution?
Will someone please get this pseudo economist out of the public discourse. Princeton? New York Times? Anyone?
Mr Krugman is one more nail in the coffin of that silly little Nobel thingy.