Crocodile tears, mostly.

http://twitter.com/#%21/search/%23croctears

How was Keynesianism supposed to work this time, Krugman? Like some kind of epic game of existential chicken? Krugam claims that all the spending under Obama - TARP II, stimulus, QE1, QE2, Obamacare, etc. – was, what, only half of what was necessary to induce demand and jump start economic growth. Yet, having spent only half what Krugman wanted, we’re possibly headed toward a credit downgrade.

So, basically, Krugman/Keynesians were arguing for the BACK TO THE FUTURE plan: from the starting line, slam on the gas in the DeLorean, try to get it up to 90 m.p.h. as fast as possible, hope that the flux capacitor sends us back to the future (or, in Krugman’s dream, back to the 195os) before the DeLorean hits the brick wall.

In reality, Krugman’s plan wouldn’t have taken us back to the future, it would have made our national finances look even more like John DeLorean’s 1982 bank book.

Never mind that the feds have been spending like drunken sailors for over a decade now (including under GWB). Apparently, Keynesianism is just like socialism in that regard: if the experiment fails it’s because it wasn’t done on a large enough scale!

You know what Keynes said after all….”In the long run we’re all dead anyway!”

Good stuff, linked @ RR…

The Debt Deal, Simplified:

PS- congrats Mr and Mrs Smith on your blessed addition~

Hey, man!  He’s a Nobel Prize winner!  Show some respect!

Hey Stacy, the Dow is down about 200 this morning.  Your prediction was just a wee bit premature. 

So the deal passes and the markets tank?  What gives?

Linked and quoted at http://wp.me/pTkxi-PB

Anytime Krugman is unhappy, I’m ecstatic.

Krugman didn’t get the Nobel for his work in economics, but for his heated opposition to everything-Bush. Now that Bush is gone, his knowledge of economics is… poor.

That means the Nobel committee doesn’t know much about money either, but the power of the credential (the Nobel Prize) trumps knowledge.

Easy test for Krugman: if given a $100 bill, would he smoke it, or go to Starbucks for a venti mocha?

4 trillion in revenue is an overly generous estimate, and that’s all I’ll say about that.  No matter what tax plan we’ve embraced in the past, revenue always stays at about 18% of GDP.

Not to mention that 4 trillion over the next 10 years won’t make a dent in the deficit if the spending continues even at its current pace.   The problem isn’t revenue, it is spending. 

The Republicans admit that, and as you may recall, voted their politicians out of office in large numbers in 2006, before the economy crashed. The Democrats grabbed the purse strings, and yanked them even tighter around our collective necks.

Both parties are to blame, but if your solution is to blame the GOP, well….who am I to tell you its a bad one? IN fact, I strongly suggest you stick with that meme. It’s much easier than holding your own party accountable, and you can take that from someone who has scars from doing exactly that.

Bitterly partisan much? I criticize Krugman/Keynesianism, and note that sizable deficits began under GWB, and you scream, “evil Rethuglicans!” (btw, the NYT chart you sent shows huge increases in the deficit during the Obama administration).
 
TARP II was introduced in Feb. 2009. TARP is a Bushobama policy. 
 
QE might not be government spending – more like “printing” electronic cash – but modern Keynesians promote aggressive fiscal AND monetary policies during a recession.
 
My point was that we did 70 percent of what Krugman called for, the recession stubbornly persisted, and now most elites agree that we cannot keep running such high deficits. What if we had done Krugman’s stimulus x2? Yet because we didn’t do stimulus x2, Krugman makes excuses, as if half-stimulus is no better than zero-stimulus. What kind of theory is that?
 
Besides, we won’t really know the true “costs” (or implications) of QE for several years.
 
But, of course, if we had only “taxed the rich” none of these problems would have happened, right? Or, maybe it was caused by the Bushobama wars?
 
In reality, if we let the Bushobama tax cuts expire, we’ll get a modest, temporary increase in revenues, the ”benefits” of which will dimish over time as the negative effects of higher taxes offset the modest revenue gains. Do you really believe that higer taxes could have accomodated the recent mushrooming size of government “investments” (gov’t spending as a percentage of GDP)?

What if we project into the future under Obamacare? 

Krugman’s actual work in economics was extremely specialized – measuring the effect of the business cycle on international trade and vice versa. 

Expecting him to understand broader economics in practice would be like expecting a particle physics expert to know anything about climate.

Also, when I was talking about “all the spending under Obama” and included QE and Obamacare, I didn’t mean strictly within the confines of 2009 – 2011.

TARP started under Bush, but much of the money was left over for the Obama administration to implement Keynesian spending along with its own “stimulus” package. When the Congress (Democrat-controlled between 2006 – 2010) and Obama raised spening levels across the board (on top of Bush’s prescription drug plan and two wars), that created the new baselines, which are now used against alleged “cuts” going forward.

Likewise, the Democrats/progressives sold Obamacare partly on the basis that businesses would be relieved to offload medical costs, etc., and that Obamacare would stabilize future medical costs, give companies more financial confidence, predictability. Obamacare was also supposed to reduce projected deficits in 2014, 2015, etc. However, revised projections show that Obamacare will be more expensive than advertised and won’t control rising medical costs. 

In other words, between 2008 (Bush introduced TARP) and now, we’ve had massive gov’t spending, plus promises of heavy government “investments” going forward, yet we’ve had woeful economic growth – not exactly a ringing endorsement for Keynesian economics and/or the future value of signaling progressive “commitments,” yet Krugman makes excuses.

If you can get past your kneejerk reaction to opposing thoughts, y’ now what I’m sayin,’ right?