Posted on 06/17/2010 8:46:14 PM PDT by blam
Krugman: This Austerity Craze Is Just Mind-Boggling--It's As If We WANT The 1930s To Happen Again
Henry Blodget
Jun. 17, 2010, 10:07 PM
Paul Krugman continues to hammer away on the idea that the world's sudden lurch toward austerity will crush the recovery and send us tumbling back into recession.
Suddenly, creating jobs is out, inflicting pain is in. Condemning deficits and refusing to help a still-struggling economy has become the new fashion everywhere, including the United States, where 52 senators voted against extending aid to the unemployed despite the highest rate of long-term joblessness since the 1930s.
Many economists, myself included, regard this turn to austerity as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession...
But despite these warnings, the deficit hawks are prevailing in most places...
Keep reading at the New York Times >
Krugman's argument here is compelling. We still don't think he has adequately addressed how we're going to deal with our long-term debt problem. But the folks campaigning for austerity also haven't adequately addressed the problem of short-term pain.
Basically, we think both camps often just shout past each other, with neither addressing the very real issues in the middle ground.
[snip]
(Excerpt) Read more at businessinsider.com ...
I wonder what the debt ratio to GDP was in the 30’s as compared to now with the Obama administration? By the way I think Krugman has been off his medicines for quite a number of years now.
I’m not sure we can spend our way out of debt, but I guess Krugman wants us to try.
Krugman is a blistering, blithering dumb piece of crap.
He thinks MORE spending is going to prime the pump. WHEN DO THESE LEFTIST STATIST IDIOTS GET THAT WE HAVE POURED HUNDREDS OF BILLIONS INTO THAT PUMP, AND IT ISN’T GOINT GET PRIMED.
Gee. Cut corporate taxes, reduce individual taxes and pass legislation that ENCOURAGES industrial development. WHAT A DAMNED NOVEL IDEA.
Instead, people who suggest this are treated like unfeeling, selfish, greedy capitalists.
The best example of this mindset was the PBS drone who interviewed Gov. Christie recently. When he talked about his plan to cut taxes, the pretty boy with the coiffed hair got all indignant: “How...how can you even TALK about cutting taxes at a time like this! I thought you were someone who said that we all had to share the pain...how come these corporations get off...”
Christie cut him off and said something to the effect of “We have taxed industry and people to the point they have all left the state in droves. If people don’t have jobs, they can’t pay taxes, and revenues go down. If you make the state attractive to industry, corporations and business will come here create jobs for people who then get to pay taxes, and revenue goes up.”
If I had been him, I would have said “AND IT WORKS EVERY TIME IT HAS BEEN TRIED, YOU DUMB ASS.”
Cut taxes, cut regulation, and cut government.
Coulda fooled me...
Krugman learned everything he knows about making money from working at the New York Times?
how did this moron win a nobel prize, did he find it in one of those robot claw arm game machines?
ROTFLMAO! Okay, that nearly made me spew my drink!
Heh, “claw arm game”...
Apparently they don't realize that you can't prime a busted pump.
Ah, you went to the same of rhetoric that I did.
It takes a special kind of stupid to be a journalist. And sometimes, they need to be reminded of their special place in the world.
/johnny
At what point does this idiot believe that government spending(money we don’t have) will make everything better? Where does it end?
This dumbass has to realize, the government doens’t, and CAN’T ‘create jobs’ to sustain any recovery. Sure the government can create a few jobs, but the government doesn’t PRODUCE anything.
Producing something value is the key here.
Our country is NEVER going to get back to where it was until we begin to make things for ourselves again. When we made things, we were a booming economy. When we stopped making things, it required a Ponzi scheme to make the economic ‘numbers’ look to with the banks giving money to everyone with a pulse to hide the decimation of our REAL economy.
Nearly all of the growth in our economy since the mid 90s has been FAKE. As in, using your credit card, and counting it as income. Pull away the federal spending of the past years, and what you will find is a deep deep depression.
Not that the NY Times would ever engage in rewriting history, but the author implies that FDR’s attempt to balance the budget simply used austerity to do so. As I recall it was FDR’s tax increases in 1937 that plunged a still weak economy back into the depression from which it had only recently begun to emerge. It took the onset of WWII and the commensurate industrial expansion to lift us out of the depression.
Remember the Times’ motto: All the News that’s Fit to Print actually means, All the News that Fits We Print.
Once again, Paul Krugman proves that he knows nothing about economics.
Yeah, that was bad timing. It was just 8 years into the depression and six years into FDR's presidency. The crazy spending of the new deal would have worked if they just gave it a few more years!
When your wallet is empty, its empty.
.
We can start by passing this into law to replace the economy-sapping income tax system along with repealing the 16th Amendment:
FairTax ENCOURAGES personal savings and capital investment staying in the USA as much as possible, and after it becomes law you will see way over US$10 TRILLION in repatriated and new liquidity enter the US financial system and millions of jobs return to the USA.
“I wonder what the debt ratio to GDP was in the 30’s as compared to now with the Obama administration? “
In 1940 it was about 50% and I don’t think that they brought it down during the 30’s. Presently it is 90% of GDP and it is estimated that it will be equal to GDP (100%) by 2012.
Alan Greenspan wrote a very compelling editorial in the Wall Street Journal (online tonight) for tomorrows paper detailing the risk of this high debt load and the reality that interest rates right now are very low and will go up eventually...actually at any time. We are very close to the failure level already is his point. Krugman is setting up for the double dip so that his ideology of choice (socialism) will have some room for argument with lay people. There are very few real economists who believe as he does.
Krugman shows himself to be either dishonest or a complete economic illiterate with this paragraph.
“In America, many self-described deficit hawks are hypocrites, pure and simple: They’re eager to slash benefits for those in need, but their concerns about red ink vanish when it comes to tax breaks for the wealthy. Thus, Senator Ben Nelson, who sanctimoniously declared that we can’t afford $77 billion in aid to the unemployed, was instrumental in passing the first Bush tax cut, which cost a cool $1.3 trillion.”
The Bush tax cuts increased the revenue the government sucked out of the economy. It didn’t “cost” anything. Like the Kennedy tax cuts, the Reagan tax cuts, and the Clinton tax cuts, the Bush tax cuts increased the government’s income and also produced a surging economy.
Krugman would have the nation follow the failed economic policies of FDR, LBJ, and Jimmy Carter. FDR turned a recession into a depression. While other countries were recovering nicely from the 1929 correction, FDR’s high tax, big spending kept the U.S. economy depressed for ten years. LBJ took a thriving economy and ran it into the toilet. Jimmy Carter’s economic incompetence gave us the worst economy since FDR’s depression.
The economic trouble we are in today was not caused by the Clinton and Bush tax cuts. It was caused by their spending and reckless growth of government. Obama’s actions have only made the situation worse.
Should Obama be dumb enough to follow this economic dullard’s advice, the nation, and the world, will be in deep economic trouble for several generations.
“how did this moron win a nobel prize, did he find it in one of those robot claw arm game machines?”
Evidently it was a a very specific topic regarding import/export actions. He is an ideologue who believes socialism is a better formula for government. In other words, he believes that a few individuals whom we call “government” should own and/or control quite a bit of what in America is called private property. That the few “anointed” ones have a divine right to the individuals property. Crazy thinking actually.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.