11
Feb
2013
Krugman Bask
OK kids, I’m back on the job. In my absence (as I worked on a major deadline) my colleagues (1, 2, and 3) have picked up the slack, but now I’m back to keep Krugman’s toes to the fire.
However, it would help if one of you could find a good example of Krugman walking through the budget numbers to “prove” that Obama didn’t really increase the deficit. Instead, Krugman has been arguing, the apparent surge in deficits is entirely due to the major recession (which implies bigger safety net payments and lower tax receipts).
This post is close to what I mean, but there were other ones (when Krugman did a Dr. Evil “one trillion dollars!” takedown) that are better for what I need.
Are either of these what you’re thinking of?
http://krugman.blogs.nytimes.com/2012/12/14/how-big-is-the-budget-hole/
http://krugman.blogs.nytimes.com/2012/12/15/further-notes-on-one-trillion-dollars/
Yes, exactly what I needed, thanks!
I remember 10 years ago when the deficit hit a record $374 BILLION! AH! With a crazy $2.1 trillion total in spending!
“But what’s really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government’s solvency.
That may sound alarmist: right now the deficit, while huge in absolute terms, is only 2 — make that 3, O.K., maybe 4 — percent of G.D.P. But that misses the point.
[…]
But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.
And as that temptation becomes obvious, interest rates will soar. It won’t happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.
I think that the main thing keeping long-term interest rates low right now is cognitive dissonance. Even though the business community is starting to get scared — the ultra-establishment Committee for Economic Development now warns that ”a fiscal crisis threatens our future standard of living” — investors still can’t believe that the leaders of the United States are acting like the rulers of a banana republic.”
— Paul Krugman, March 11, 2003
http://www.nytimes.com/2003/03/11/opinion/a-fiscal-train-wreck.html
The deficit is now twice as high a percentage of GDP as it was when he wrote this. The ten-year deficit predicted by the CBO in absolute terms then seems like just another yearly deficit now. And the solution to our problems now is, according to Bernanke and Krugman, “printing money, both to pay current bills and to inflate away debt”.
The idiocy is astounding. I just can’t understand this whole “liquidity trap” bullshit that supposedly makes the whole think go wonky, such that what would cause great problems ordinarily is the solution. It’s like saying that if I were to drink three beers, I would wake up with a hangover, but if I feel bad, the best thing to do is drink myself into alcohol poisoning.
The national debt increased 1.4 trillion dollars in 2008. The national debt increased 1.2 trillion in 2012. Obama reduced the deficit by 200 billion (more if you adjust for inflation and population growth, even more if you use shadowstats bogus inflation numbers.)
Facts are pretty stubborn.
National Debt:
12/31/2007 9,229,172,659,218.31
12/31/2008 10,699,804,864,612.13
12/30/2011 15,222,940,045,451.09
12/31/2012 16,432,730,050,569.12
Aren’t they just? What happened in the gap from 2008 to 2011 that you omitted?
( 15222940045451.09 – 10699804864612.13 ) / 3
gives 1.5 trillion dollars deficit AVERAGE each year for three years running. So you basically managed to completely ignore the worst part of the problem. We could argue about how much to blame on Obama or Bush (both deserve some blame).
Oh come on Tel,
If we ignore the 1930s, and 2008-now, and a bunch of less significant instances the last 100 years, then central banking is clearly, obviously part of a stable, growing healthy economy.
It’s called correcting for outliers in order to paint a deceiving picture. Look into it.
From December 13, 2012 5:06:24 GMT til December 13, 2012 5:06:25 GMT, the national debt dropped by 52 cents, thus exposing the savage austerity that Obama has been practicing.
You turkey. We must leave such nomenclature decisions to either totalitarian dictators, or to the majority for a vote.
Those are the only permitted “extremes” allowed. You’re breaking the rules…so you are making me feel uncomfortable….so you must be wrong…so I must challenge you…so that I can feel better…because feeling good means I’m right….because right and wrong are slaves to the passions…because…