The punchline from my latest blog post at The Beacon:
Are these really the most outrageous examples of “voodoo economics” to come out of a keyboard in the last few years? Does a projection of 5.3 percent average real GDP growth really deserve three question marks? After all, Krugman is the one who has argued the following:
- The Obama Administration could’ve sidestepped the debt ceiling standoff by having the Treasury issue a trillion-dollar platinum coin. (This was such a palpably absurd suggestion that Jon Stewart saw the comedy in it.)
- The people warning about speculators attacking a nation’s bonds are wrong, because (a) it would never happen for responsible governments like Japan and the U.S. but (b) it would actually be agood thing for their economies if speculators attacked their currencies.
- In 2011, it would have been good for the EPA to force businesses to spend money complying with new environmental regulations, even setting aside and environmental benefit, because we were in a liquidity trap. In Krugman’s words: “This puts us in a world of topsy-turvy, in which many of the usual rules of economics cease to hold. Thrift leads to lower investment; wage cuts reduce employment; even higher productivity can be a bad thing. And the broken windows fallacy ceases to be a fallacy: something that forces firms to replace capital, even if that something seemingly makes them poorer, can stimulate spending and raise employment.”
- Although he was being intentionally provocative with his language, Krugman quite seriously recommended solving America’s long-term fiscal imbalance through “death panels and sales taxes.”
- And of course the masterpiece: In light of Republican obstinancy, a fake alien invasion would have been good economically by prodding politicians into supporting deficit spending (on a nonexistent threat) adequate to restoring Aggregate Demand, and fixing the slump within 18 months.
Looking over the above positions that Krugman has taken just in the past five years, are we really going to take Gerald Friedman out to the woodshed for saying Big Government spending can achieve 5.3 percent real GDP growth? Who’s the real voodoo witch doctor here?