For Some, There Can Never Be Enough Government Spending
In his New York Times column, Paul Krugman blames the coming British recession on the government's "austerity." In the Left's parlance, "austerity" means the government is not spending and in particular deficit spending enough.
a. Of 44 major economies in the world, the British have been running the highest budget deficits of any country except two - Greece and Egypt are higher.
b. British real government spending has risen every year through the financial crisis
Presuming Krugman has access to these basic facts, is his argument that Britain should be deficit spending even more (and if so, wtf is enough?) or is this just political hackery to help Obama dispel concerns about his deficits?
Rick Caird:
re: b. I vote for the latter.
January 30, 2012, 9:52 ammarco73:
Occam's razor: political hackery. Has Krugman ever identified ANY government spending that wasn't great?
January 30, 2012, 10:53 amHasdrubal:
Scott Sunmner might have the original post on this. http://www.themoneyillusion.com/?p=12891&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Themoneyillusion+%28TheMoneyIllusion%29
He makes a great point about the Keynsian model:
"Think about the Keynesian model you studied in school. If you are three years into a recession, and you slightly reduce the deficit to still astronomical levels, is that supposed to cause another recession? That’s not the model I studied. Deficits were supposed to provide a temporary boost to get you out of a recession. At worst, you’d expect a slowdown in growth."
January 30, 2012, 1:06 pmWill:
The model is if your in trouble spend more. If that doesn't work it's not because the theory is wrong, it's because you didn't spend enough. At any point in this model you may be tempted to cut spending, but be forwarned that will cause the collapse of the economy and civilization!
January 30, 2012, 7:25 pmIan Random:
I was listening to some left wing podcast from England and they said the most ludicrous thing. They need to borrow money now so that the youth will have jobs. My jaw hit the floor. There is also some bizarre statistic out there that in some regions of the country, the state accounts for more than 50% of the economy.
January 31, 2012, 7:46 pmmarkm:
Keynesianism is another one of those ideas that's never really been tried - politicians are happy to implement the "spend more" part of it, but when times are good, they will never cut back on spending, raise taxes, and save up a surplus against the next time a stimulus is needed.
February 6, 2012, 3:51 amAllen:
"Presuming Krugman has access to these basic facts"... No need to presume. We know he does. That he chooses to ignor e them is all the more reason for the world to ignore Paul Krugman.
February 11, 2012, 12:52 pm