Is there anyone funnier than Keynesian it-girl Paul Krugman? He gets his economic proposals from The Twilight Zone, he is infatuated with the Democratic Party, and he thinks breaking windows creates prosperity. There will never be another Paul Krugman in our lifetimes.
During the reign of former President Barack Obama, Krugman discussed how important it is to run budget deficits. He contended that deficit-financed spending can “End This Depression Now!” To Krugman, you were the next Adolf Hitler if you supported balanced budgets – this might be hyperbole, but he did make the case that sound money led to the rise of Hitler (SEE: 6 ways Paul Krugman has been wrong on the economy for the past decade).
Then, President Donald Trump happened. Shortly after the election, he wrote a blog post in The New York Times, titled “Deficits Matter Again.” He then argued against deficit-financed spending, only a six weeks after writing in favor of it (SEE: Paul Krugman is now AGAINST deficit-financed spending because of Donald Trump).
Now that the Democrats have taken control of the House of Representatives, and could very well retake the White House in 2020, Krugman has changed his tune once again.
In a piece titled “Who’s Afraid of the Budget Deficit?” he opines:
Deficit obsession was deeply destructive in the years that followed the global financial crisis, helping conservatives push for austerity measures that held back economic recovery for years. True, we no longer have a depressed economy, and austerity is a lot less destructive when the unemployment rate is less than 4 percent than it is when unemployment is more than 8 percent. But another recession will come, sooner or later — probably sooner rather than later — and a rigid budget rule will not be helpful when it does.
Furthermore, there are things the government should be spending money on even when jobs are plentiful — things like fixing our deteriorating infrastructure and helping children get education, health care and adequate nutrition. Such spending has big long-run payoffs, even in purely monetary terms.
Meanwhile, the federal government can borrow money very cheaply — the interest rate on inflation-protected 10-year bonds is only about 1 percent. These low borrowing costs, in turn, reflect what seems to be a persistent savings glut — that is, the private sector wants to save more than it’s willing to invest, even with very low interest rates.
Given this reality, why not put some of those excess savings to work in high-return public investments? Should we really refuse to spend money repairing sewer systems or providing child nutrition if doing so raises the deficit a bit, with only a minor impact on future interest costs?
But, you may say, isn’t it politically important for Democrats to present themselves as the party of fiscal responsibility? I’m highly skeptical.
This is bad as defending the warmongering neoconservatives because they hate Trump (SEE: Paul Krugman defends neocon warmongers because they hate Trump).
Krugman isn’t an economist, he is a hack for the Democrats who doesn’t adhere to any standards or principles. But Keynesian disciples, leftists, and Krugman worshippers don’t care about his constant logic revisions.
He is the personification of the old Groucho Marx joke, “Here are my principles, and if you don’t like them, then, well, I have others!”
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