The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Is Paul Krugman Simply Immoral?

Posted on | January 2, 2012 | 24 Comments

by Smitty

From Nobody Understands Debt, emphasis mine:

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
This is, however, a really bad analogy in at least two ways.
First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

I grasp that Krugman is correct in the sense that he depicts accurately a mentality present in the bulk of our policy makers. I also gather that returning to a fundamentally valid fiscal approach is going to hurt, hurt, hurt. What Krugman and the rest of his ilk have absolutely never done is shown why citizens should quietly accept what amounts to an acceptance of theft. What is the moral basis for your argument, which appears to be pure pain avoidance?

I’m not saying our system is unethical, for it has been accepted for decades. My question in the title could be restated:

“How can those members of society who still cling to a notion of ‘right and wrong’ that is stronger than ‘Did Congress spew some legislation?’ be reconciled to your notion of debt?”.

If we agree that “debt” does not mean what, say, George Washington would have thought it means, then please publish the re-definition of the term. You, and our policy makers overall, are abusing the term “debt” in a manner similar to the way some would like to abuse the term “marriage”, which gets at your second point.

When the demographics start to go bad, as with Japan, the argument that we “owe it to ourselves” becomes as foolhardy as tampering with the word “debt”. While not totally out of the childbearing range, I’ll be blessed to hit the replacement rate, personally. Stacy is picking up the slack, but who will help his kids carry the “debt” load, Paul? Your cat? Debt is debt, marriage is marriage, and the Progressive attempts to freebase these symbols are ++ungood.

Americans are going to sober up about debt, Paul. The “or not” alternative is untenable. Also, your ideas.

via Memorandum

Related: neither #OccupyResoluteDesk nor the GOP look particularly great in this graph:

Update: Marginal Revolution, “Krugman v. Krugman”

Now to be fair, Krugman covered himself in 2003 in a credible way he said “unless we slide into Japanese-style deflation, there are much higher interest rates in our future.” Thus, I do not fault Krugman’s forecasting ability. What I do fault is that despite a 180 degree about-face, one thing remains constant in all of Krugman’s writings, anyone who disagrees with him is portrayed as a mendacious idiot. In truth, Heritage today and Krugman 2003 both have legitimate concerns about the long-term debt situation of the United States and it would have been to the credit of Krugman 2012 had he acknowledged that point more fairly.


24 Responses to “Is Paul Krugman Simply Immoral?”

  1. Anonymous
    January 2nd, 2012 @ 12:49 pm

    The problem with creating one’s own reality is that sooner or later the real reality pops up and bites one in the ass.

    Does anyone find it interesting that Obama is an outlier in that graph — that apart from him, every Democrat president (including those with Democrat congresses) has been an island of fiscal responsibility in a sea of Republican red ink?

  2. Michael Smith
    January 2nd, 2012 @ 12:49 pm

    What Krugs also doesn’t get is that it isn’t a “debt we owe to ourselves”, it is a debt that is paid back by a declining number of actual taxpayers – about 65 million or so out of a population of 310 million , with about 40 million or so paying about 84% of the tab. The debt may be “owed” to “us” but the payment slip lands in my lap every payday.

    When you borrow to pay for everybody at dinner and only one guy gets stuck with the credit card bill, that is redistribution just a surely as Marx did it.

    Another point is that it isn’t just debt growth – it is the actual cost to service debt + government spending must be less than the actual tax revenue collected, not the “tax base”.

    I don’t know why I expected basic Business 101 from an ideologue.

  3. Ccoffer
    January 2nd, 2012 @ 12:59 pm

    Interesting? It’s interesting in that it reveals what a pack of scumbag liars populate the American left. The number with Clinton coincides with republican control of congress. Bush’s number was lower until that national tragedy when the democrat scum gained control of congress and things have gotten progressively worse ever since. There is a clear message there for any honest person to see. If you’re some prick obsessed with hating republicans, not so much.

  4. The Cob
    January 2nd, 2012 @ 1:00 pm

    Morality is irrelevant to pragmatists like Krugman. As are old fashioned concerns about stable definitions of words. He’s a Party man. Anyone who is worried about consequences that can be politically delayed will be ignored and/or ridiculed as naive.

  5. Anonymous
    January 2nd, 2012 @ 1:16 pm

    It’s not about “hating Republicans.” It’s about noticing the information (check your sarcasm meter — the “island of fiscal responsibility” thing should have pegged it).

    Carter had a Democrat congress and something of a free honeymoon because the US was in GOP hangover from Nixon. Yet the US government ran lower deficits as a percentage of GDP under his administration than under Nixon’s, Ford’s or Reagan’s.

    Why? One obvious reason is post-Vietnam “peace dividend” stuff.

    Another is that GDP plateaued in the early 70s then started rising again about the middle of the decade, hiding a multitude of government spending sins.

    One reason that it isn’t is reduced government spending. That trended upward under Carter.

  6. EBL
    January 2nd, 2012 @ 1:24 pm

    Paul Krugman is probably one of the biggest proponents of “creating his own reality.”  Immoral is not the right way to describe it.  Pathological liar is better.  

  7. DaveO
    January 2nd, 2012 @ 2:01 pm

    Long answer to the question of Krugman’s morality: YES!

  8. Randy G
    January 2nd, 2012 @ 2:16 pm

    Krugman is just the ferret faced imbecile we all think he is.

  9. WarEagle82
    January 2nd, 2012 @ 2:31 pm

    Krugman is irrational.  Who would pay attention to anything he says?  

  10. Anonymous
    January 2nd, 2012 @ 2:51 pm

    Here’s one of my “favorite” Krugman columns from August, 2002 where he endorses the idea of creating a housing bubble to offset the recessionary impacts from the burst technology bubble.  He’s a charlatan of the highest order.

  11. Regicide
    January 2nd, 2012 @ 3:16 pm

    Not so much….
    “as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

  12. Anonymous
    January 2nd, 2012 @ 3:50 pm

    I don’t know what “not so much” means.  If you are saying Krugman did not endorse the idea of creating a housing bubble you are wrong.

    The point of the column is that Krugman was worried the economy was about to enter a double dip recession in 2002 (the first clue is the title, “Dubya’s Double Dip?”).

    And in Krugman’s infinite wisdom he concluded his column by endorsing Paul McCulley’s notion that policy makers needed to create a housing bubble to avoid the double dip recession that Krugman believed was coming:

    “To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

  13. ThePaganTemple
    January 2nd, 2012 @ 6:23 pm

    Krugman hasn’t had a nervous breakdown yet? That guy needs heavy duty medication, he makes John Nash look like an ordinary everyday math geek. You’d think after all this time somebody would invent a cure for economists.

  14. JeffS
    January 2nd, 2012 @ 6:27 pm

    Spot on! 

    Although I would add on “borderline sociopath” as well. 

  15. JeffS
    January 2nd, 2012 @ 6:31 pm

    Krugman is not a pragmatist; that implies some connect to reality.  

    As noted above, he’s a pathological liar and borderline sociopath.  As such, he’s a tool (or useful idiot, if you like) for the socialists and their allies.

  16. William_Teach
    January 2nd, 2012 @ 8:45 pm

    “U.S. debt is, to a large extent, money we owe to ourselves.”

    How the hell does that tool have a Nobel in economics? To a large extent, it is money we owe other countries, particularly China. Which then takes that money to do things, like, say, increase the size of their military, build carriers, perhaps invade Taiwan, all because politicians listen to @ssholes like Krugman.

  17. Chris Hadrick
    January 2nd, 2012 @ 8:51 pm

    “As Paul McCulley of PIMCO remarked when the tech boom crashed, Greenspan needed to create a housing bubble to replace the technology bubble. So within limits he may have done the right thing. But by late 2004 he should have seen the danger signs and warned against what was happening; such a warning could have taken the place of rising interest rates. He didn’t, and he left a terrible mess for Ben Bernanke.”

    ^from 06. so he’s essentially saying the bubble was a good idea but he would have done it differentlty.

    In the previous column Smitty posted the neoconservatives and the chicago school types (greenspan) were described as being failed elites. Krugman and the keynesians are the lefts version of that. He said the recession was going to be over well over a year ago.  When they ask why it didn’t work they say it wasn’t big enough. That’ll be the next Icarus to fall, Keynes. 

  18. one_droid
    January 3rd, 2012 @ 8:04 pm

    This is not a moral issue. In the end, Krugman is worried about the debt as anyone else. He is just trying to explain, that “returning to a fundamentally valid fiscal approach” RIGHT NOW will not only hurt the economy, it will also hurt the ability of US government to pay the debt. Those demanding the austerity now are making the US defaulting on its obligations more probable — and that is what Krugman is trying to prevent.

  19. one_droid
    January 3rd, 2012 @ 8:07 pm

    Actually, when China lends us money, it is we who can spend it on our military and carriers.

  20. Watsonpaul
    January 3rd, 2012 @ 9:27 pm

    Hey Mikey, are you telling me that the only people that pay taxes are the top 40 million? Or are you telling me that they pay most of the income tax? Can you tell me what percentage of the federal revenue is covered by income tax? Can you tell me what percentage is covered by payroll taxes? How about the level of federal taxation as it applies to GDP? How does that level of taxation compare to other times when people like you weren’t carrying water for the “haves andthe have mores”? How many times have we lowered taxes and gone to war? You really believe the rest of us are on the take? I’m not in the club, You’re dumb enough to think you are.

  21. Michael Smith
    January 4th, 2012 @ 7:23 am

    Wow…angry much? Actually I do have answers for you…not
    that you will listen or even believe them.

    First, what are “payroll taxes”? These are the portions of
    income tax withheld by employers, social security contributions and
    unemployment “insurance” taxes. I never said that the top 40% are the ONLY ones
    who pay taxes but since the lower 47% have no tax liability, they actually get
    the income tax that was “withheld” refunded to them, there is also a segment
    that qualifies for the Earned Income Credit that allows them to receive a “refund”
    even if they paid NO taxes.

    The lower 47% should be pissed, too because the government
    is taking their social security money and domain it into the general fund to
    keep the spending party going…and a cut in these “payroll” taxes also reduce
    contributions to social security, driving it even farther down the road to insolvency.
    The only “taxes” that go to the intended purpose out of the “payroll” taxes are
    the unemployment insurance payments.

    What I do know is
    that Payments for Individuals, or PFIs, have skyrocketed more than 1,600
    percent since 1945 — from 1 percent of GDP to over 16.4 percent in 2010. In
    2010, the feds spent approximately $2.39 trillion in PFIs, amounting to nearly
    two-thirds of all federal outlays — now over 24 percent of GDP under the
    Obama-era spending explosion at a time when tax collections, due to
    recession-reduced incomes, are now only 14.8 percent of GDP.

    For the first time
    in history, PFIs — at 16.4 percent of GDP — exceed federal revenues. The
    difference — 1.6 percent of GDP — amounts to about $228 billion. To break it
    down in simple terms for you, the feds spent roughly $228 billion more than
    they collected per year in taxes — on just PFIs.

    As far as the level
    of taxation as a % of GDP, that isn’t even the point; the point is that the number
    of people actually paying taxes gets smaller every tax year. We already have
    the most “progressive”
    income tax scheme of any industrialized country.

    Income “inequality”
    grew under Bush? Nope – it was greater
    under Clinton. Want to try higher taxes? Soak the “rich” maybe? Already
    been done…Bush
    did it. It also doesn’t work to “soak the ricvh” – for example, the top
    income tax rate was 73% in 1921 – and the “rich” didn’t pay, they moved their
    money to tax exempt municipal bonds and took capital out of the economy.

    So there you go,
    comrade. Hope that clears it up for you. You are dumb enough to think that Marxism

  22. ThePaganTemple
    January 4th, 2012 @ 9:26 am

    Yeah, but the problem with your assessment is, there was never any time that was right to return to a fundamentally valid fiscal approach according to that crazy son-of-a-bitch. Back in the days when it would have been easier, back when Obama was pushing his stimulus spending, he was bitching because the Democrats was NOT putting enough money into the stimulus. He damn sure never worried about the prospects of paying our obligations then. He was wanting to keep on piling it on to the rate of two or three times as much as even Obama wanted. These bastards want us to stay in hock, and Krugman is one of the worst offenders. His schtick got old years ago, and he has nothing of worth to say now.

  23. ThePaganTemple
    January 4th, 2012 @ 9:30 am

    I question whether he is a sociopath. Sociopaths by definition have the ability to feign empathy and can appear as normal and well-balanced as anyone else. That sure doesn’t apply to Krugman. That guy is clearly unhinged, and there’s no hiding it.

  24. one_droid
    January 4th, 2012 @ 1:34 pm

    The right time to put the fiscal house in order is when the economy is booming, not when it is in the slump — that is what Kruman keeps telling.

    Also, you may want to read this: