17 Oct 2015

Contra Krugman Episode 5: Who’s Crazy?

Contra Krugman 2 Comments

Tom and I tackle Krugman’s latest column, wherein he complains about the “con man” Paul Ryan and his (allegedly) insane budget plan.

2 Responses to “Contra Krugman Episode 5: Who’s Crazy?”

  1. guest says:

    You guys may have forgot to link to the Stockman article, “10,000 Monkeys tapping …” or something.

  2. Tel says:

    As a Very Cynical Person (VCP) I doubt that Krugman would be plinking targets unless those were politically valuable targets to be having a go at. He seems anxious to support Hillary in her hour of need, and just as anxious to bring down any hint of Tea Party influence.


    US government spending at both State and Federal level has flattened out, and the turning point year was probably 2011. Now in January 2011, Paul Ryan gave a speech in reply to the State of the Union and the whole speech was published in the NYT as well as many other places. The majority of it was about the danger of growing government debt and spending. It may have been very light on detail, but it put the idea of debt into the spotlight.

    There were of course many others: Allen West was pushing the idea of a balanced budget, Boehner seemed half interested for a while, Ted Cruz gives a balanced budget speech now and then. Ron Paul has been warning about the problems of big government and monetary stability for decades, while very few people listened. The NYT can safely ignore Ron Paul and have a bit of a laugh at him now and then. What couldn’t be ignored was around 2010, 2011 there was a bit upsurge in public attention towards the debt problem. People could see for themselves that the Keynesian stimulus wasn’t working. Even regular non-economists could see it.

    In that chart you can see from 2007 to 2010 the chart rises almost vertical as Federal spending goes up, but GDP growth just isn’t happening. After that it turns around, and Federal spending stays flat while GDP growth does happen. There’s clearly both a change in strategy and a change in outcome happening around that pivotal year. Maybe some con-man tactics were required to get that to happen (a lot of things in Washington seem to require con-man tactics, or “Grubering” as it has become known) but somehow it happened.

    That’s why I’m a tiny bit more optimistic than Peter Schiff about where this is going… I think there are elements of the government who have figured out (but won’t say out loud) that Ron Paul was right about a great many things. So now and then they do have to exercise a bit of restraint. I don’t know how much of the government understands this, but seems like enough to make a difference.

Leave a Reply