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Krugman: "The deficit doesn't matter"
Monday, November 30, 2009
Well, apparently there is at least one thing that former Vice President Dick Cheney and Nobel Prize winning economist (and unofficial White House adviser) Paul Krugman have in common. They both feel the same way about deficits - they don't matter.
On yesterday's This Week with George Stephanopoulos, Krugman made what sounded like an off-hand remark, one that almost didn't even seem worth saying as it was so obvious to everyone in the room. From the ABC transript:
Important political fact, which is that whatever you would do with the deficit, the public won't notice. In 1996, a majority of Republicans thought that the deficit had increased under Clinton, even though we had in fact been on an incredible run. So no, I mean, the deficit doesn't matter. The economy matters. And that's why somehow or other, Obama has got to get jobs being created.Yes, I know. The national debt is now over $12 trillion, not the $11.5 trillion as depicted above. No one really seems to care - $11 trillion, $12 trillion, $20 trillion? It's only money.
8 comments:
So what does Tim think? Is Krugman right?
Deficits certainly do matter and I wouldn't be surprised if more than a few elected officials learn that the hard way a year from now.
I think Krugman this context means that they don't matter politically. And I think he's probably right. Deficits are by definition a way of pushing things out into the future, but politics is mostly entirely present oriented. So until we have more trouble actually financing our debt, the politicians will continue to party on.
When we can't borrow any more money and default on the debt, we will see how much deficits matter.
They don't ever plan on repaying the debt, so they don't care how high it goes. Spendthrifts wantonly waste the nation's resources.
Deficits may not matter politically, but after U.S. default, 5,000 percent inflation probably will.
So, dear professor Krugman, $12.1 trillion debt and $1.5 trillion deficit does not matter.
Well then why don't we just stop paying the $350 billion interest on the debt. It doesn't matter right?
I realize I'm late to the party responding to this, but it struck me that...
As much as I detest Krugman, he does kinda have a [somewhat misstated but still valid] point. Jobs, and by extension income, self-reliance, spending, and financial security, are more important to both the long-term well-being of the economy and the short-term perception of the country's economic state. Without private industry, wealth creation, and economic opportunity in a competitive business environment, the American dream gets snuffed out, people become depressed and unmotivated, and recovery becomes impossible. Even if Obama could somehow pay off the national debt while nationalizing the rest of private industry in America and socializing all the services (medical care, etc.), it wouldn't fix the economy, or people's perceptions of the country's financial well-being.
If Krugman has even an ounce of intellectual dignity or courage, he'd follow his observation to its logical conclusion and call for Obama's immediate resignation, and replacement with someone less opposed to private industry and jobs. Instead, we get an intellectual turd and the same old liberal message: we should have more government intervention, that will help the problems this time. Despicable, as usual.
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