Tuesday, September 7, 2010

Why Paul Krugman Is An Imbecile—or a Fraud

Update I, below. Update II, below. 
  
There’s a saying in Spanish: Por la boca muere el pez. “A fish dies by its mouth.” Nobel economics laureate Paul Krugman has a recent op-ed piece in the New York Times which goes an awful long way to showing that he is a complete and utter imbecile—or the worst sort of cheap huckster imaginable. 
  

It is one or the other—there are no other alternatives. This wasn’t a casual blog where Krugman “misspoke”—this was a full-on editorial in the Sunday edition of the Times on Labor Day weekend. So what Krugman said was thought out, and dead serious—and so foolish or ridiculous (depending on your point of view) that he can no longer be taken seriously: 
  
In the piece, titled “1938 in 2010”, Krugman argues that 1938 was similar to 2010, in that the Federal governments’ stimulus program—then implemented by FDR—was insufficient to pull the country out of the Great Depression. Krugman argues that this is similar to what has happened to the Obama administration—Krugman has forever been arguing that the Obama stimulus package was “not enough”. 
  
This in itself is not objectionable—in fact, I think policy disagreements are a good thing. They lead to ultimately better solutions, if all sides of a policy debate allow that opposing sides might have very valid points. Krugman’s very valid point is, unemployment in the current Global Depression is severe—therefore, the quick-fix of fiscal stimulus might be best, in order to assuage people’s suffering. 
  
But then, in order to make his point that more stimulus is needed, Krugman crosses the line:





  
In Krugman’s analysis, 1938 was different from 2010: “Luckily” (most definitely in quotation marks), World War II came to Europe in 1939, and to the U.S. in very late 1941. In Krugman’s analysis, the War saved the U.S. economy. It allowed the Federal government to go into monstrous fiscal debt, in order to fight the war with Nazi Germany and Imperial Japan. This isn’t novel or controversial. 
  
But then, Krugman misleadingly claims the U.S. government “borrowed an amount equal to roughly twice the value of GDP in 1940—the equivalent of roughly $30 trillion today.” 
  
It’s a sneaky asseveration, partly because it sounds plausible—everyone knows the Federal government went into huge debt to finance WWII—and partly because it’s technically accurate: United States’ GDP in 1940—before Pearl Harbor—was $101 billion, and by the end of the war, 1945, the Federal government had borrowed $250 billion. Apply simple math: That’s more than twice 1940’s GDP—closer to 250% of the gross domestic product. Of 1940
  
But Krugman is fudging the facts—1945 GDP was $223 billion. So the fiscal debt by 1945 was not “twice the GDP”—it was 116% of GDP. Comparing 1945 debt levels to 1940 GDP numbers isn’t apples to oranges—it’s flat-out misleading. 
  
If you’re going to make a comparison, current debt-to-GDP ratio is much more accurate, in seeing how far the U.S. Federal government went into debt during that period. If we look at the period of the Great Depression and World War II, this is what we find: 
  


(Gross Public Debt, 1930–1950. The blue band is Federal government debt, the red band is state debt, the green band is local debt. Source is here, for both charts and raw data.)
  
As can be readily seen, the U.S. Federal government debt never surpassed 45% even at the height of the Great Depression. When it peaked in 1946, gross public debt never crossed 130%—and that was after fighting the largest war in human history. 
  
The situation in the U.S. today is nowhere near the same—except in terms of fiscal debt: 
    
  


(Gross Public Debt, 1970–2010. Color scheme is same as above. Source is here, for both charts and raw data.)
  
Federal government debt is just shy of 100% of GDP. If we include state and local debt, gross fiscal debt is tiptoeing to 120% of GDP—and now Paul Krugman is saying that even more debt should be piled on. 
  
According to Krugman: It worked in 1945, so it must be good now!
  
Krugman—obviously—used misleading data points in order to sell his policy prescription. He denies the incredibly different situation the United States finds itself in now, with where it was in 1938. Furthermore, he misleadingly fudges data, mixing 1940 and 1945 data, in order to prove his point. 
  
I will not fall for the trap of inferring that Krugman is arguing in favor of total world war, in order to save the U.S. economy—I think some commentators who are making that inference are driven by mean-spiritedness towards Mr. Krugman. 
  
But I will state—categorically—that Krugman’s misleading use of data to prove his point is something a sophomore eccy student would pull: Not someone who expects to be taken seriously. 
  
If that were his only sin in the piece, then it might be excusable. But then, Krugman makes a truly despicable statement: “Deficit spending created an economic boom [in the post-War years]—and the boom laid the foundation for long-run prosperity.”
  
Krugman is an imbecile—or he is deliberately distorting history in order to sell his spend!-spend!-spend! bromide like a cheap salesman goosing a distracted customer. 
  
As everyone with even a passing knowledge of post-War history knows, literally the rest of the world was a heap of rouble in 1945—only the United States was untouched by bombs and mortar shells. 
  
The prosperity the United States experienced in the two decades after World War II had nothing to do with deficit spending, and everything to do with the fact that it was the only industrialized nation still standing after a total world war—so the rest of the world was forced to buy from the U.S. because there was no one else left to buy from
  
Deficits had nothing to do with it. 
  
Krugman is too smart not to know this—I cannot really believe that he would be ignorant of this basic post-War history. 
  
Therefore, it’s obvious to me that Paul Krugman will say literally anything in order to support his prescription of increased Federal government spending. Not even facts and brute history matter to the man. In a very real sense, Krugman is now Glenn Beck, only with a doctorate in economics, and a hysterical fear and hatred of austerity, rather than terrorists. 
  
I used to take Krugman seriously—often I disagreed with him, but at least I thought he was honestly arriving at his conclusions. But after this piece, I find myself dismissing him with contempt: In his urge to sell his policy prescription, he has sold out his integrity. There is literally no lie or falsehood he will not stoop to, in order to “win” the argument. 
  
Like the fish of the Spanish aphorism, Krugman has killed himself by his mouth. 
  
Update I:
  
Tyler Durden, editor extraordinaire of Zero Hedge, kindly pointed out the following quote by Krugman from August, 2002
[T]he recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. 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.
(Underline emphasis added.)
  
Again, it’s a shifty line: Krugman seems to be egging on the Fed to do as PIMCO suggests—id est, blow a housing bubble. There’s enough plausible deniability in the line—“. . . as Paul McCulley of Pimco put it . . .”—to make it so that Krugman could potentially weasel his way out of this policy prescription. 
  
But then again, he said it: Blow a housing bubble, then let it loose on aggregate demand. As I've argued previously, Krugman and the “saltwater” economists see increases of aggregate demand levels as the only good—in other words, spend!-spend!-spend! 
  
They don’t seem to realize that, eventually, that spending’s got to be paid. That’s why, they fail. 
  
Update II:
  
Krugman is now changing his tune—he’s toned down his spend!-spend!-spend! rhetoric, and is coming to realize that the U.S. fiscal debt is a bigger problem than he had previously admitted. 
  
So now, Krugman is proposing default-by-inflation. This by way of Business Insider
So what will happen? In the end, I'd argue, what must happen is an effective default on a significant part of debt, one way or another. The default could be implicit, via a period of moderate inflation that reduces the real burden of debt; that's how World War II cured the depression. Or, if not, we could see a gradual, painful process of individual defaults and bankruptcies. 
I swear to God, his lying is like some sort of tic—Krugman once again distorts facts in order to buttress his opinion. But as everyone knows, inflation in World War II had absolutely nothing to do with “reducing the real burden of debt” brought on by the Depression.
    
On top of that, as I showed above, the Federal government went into serious debt during WWII—not before, as Krugman is implying. And the Federal debt of 1942–45 was not inflated away, as Krugman is stating: It was worked off in the Post-War Boom—which is what ultimately cured the Great Depression. 
  
Krugman reminds me of that famous crack about FDR: He’s a man who’ll never tell the truth, when a lie will serve him just as well. 
  
But getting to the meat of Krugman’s change of opinion, he is now following the Fed’s strategy: Default by inflation. 
  
(I’ll leave it to the peanut gallery to catcall the obvious question: Whether or not this is Krugman’s new stance because he believes it, or because he’s angling for a job in the Obama administration, now that Summers is out and Tiny Tim is being handed his hat.)
  
Personally, I have no truck with default-by-inflation per se. The problem is, just like you can’t be “a little bit pregnant”, in the Global Depression we are experiencing, you can’t have “a period of moderate inflation”—not when Treasuries are in a bubble. Not when the dollar is weakening severely against commodities even as we speak. Not when the very currency and debt mechanism of the United States is skating on some very thin ice. 
  
Krugman ignores these facts rather olympically—which only reinforces my original question: Is the man an imbecile, or a fraud?


31 comments:

  1. I'll tell you something Senor Lira (love the Lira) if you are going to get your information from the S&M MSM, you are going to be writing a lot of posts like this.
    We visit you to learn things we don't know.

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  2. As always, Gonzalo, I enjoy your thoughts because you don't mince words. ROFLMAO...

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  3. I believe there is another similar saying which is "The fish rots from the head." As for Krugman, Over the years, I, and many others, have spent much time tearing him a new one. He's a hack for the PTB and nothing more. But then Krugman's spiritual mentor, Keyne's, has always been the ruling classes wet dream of an economist.

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  4. Why the attack on Beck? Loved your piece, except you might try arguing against Beck's theories and conclusions rather than just attack him in a piece about Krugman.

    Right or wrong in his “conspiracy” analysis, (I believe his has it somewhat correct), Beck believes in the greatness of Capitalism, Krugman on the other hand is a despicable leftist that will do and say anything to achieve socialism.

    To compare the two is not intellectually honest. To say Krugman was once respectable and now he is in the category of Beck, leads me to believe you take yourself too seriously. Krugman has been a leftist hack for as long as he has been writing.

    Pick apart Beck’s analysis and you will be more respectable, but your ad hominid attack on him really takes away from an otherwise excellent article!

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  5. Señor Lira:

    There is a third possibility here, and that is that Mr. Krugman is "blind". It's not fair to pick on the disabled. After all, he does have a Nobel Prize and it's very likely that he has been blinded by all those camera flashes going off in his face.

    ".... The prosperity the United States experienced in the two decades after World War II had nothing to do with deficit spending, and everything to do with the fact that it was the only industrialized nation still standing after a total world war—so the rest of the world was forced to buy from the U.S. because there was no one else left to buy from. ..."

    Absolutely agree..... Perhaps one of the greatest contributions that we foreigners can make to the ethnocentric MSM pundits is... That America is not the "greatest" nation in the World, it is the "luckiest" nation in the World. A "luck", which I might add, is about to run out.

    If someone is doing it to you, it's genocide.... If someone is doing it to someone else, it's ethnic cleansing.... If we're doing it to someone else, it's Manifest Destiny... Funny how things work themselves out....

    Best regards,

    Econolicious

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  6. You blast Krugman for asinine statements, yet make one like this?

    "The prosperity the United States experienced in the two decades after World War II had nothing to do with deficit spending, and everything to do with the fact that it was the only industrialized nation still standing after a total world war—so the rest of the world was forced to buy from the U.S. because there was no one else left to buy from. "

    Really? That's it? You mean the Marshall Plan which flowed aid to the ravaged countries of Europe wasn't a factor? By the way, who implemented that program? The US government. What paid for it? Guess...

    How about the arms race? No impact from that form of gov't spending? You won't dare say that that's a private industry would you?

    Denying gov't spending had a significant impact on the post WW2 boom is asinine. Listen, I understand the whole "government is the problem" routine. I get it, it's easy to bash a strawman, especially one that operates under different rules than the ones you and I operate under. It's also easy when bashing the government and spending is the fad of the day. But it's just incorrect on so many levels.

    I had no idea who the hell you were until this was posted on ZeroHedge. I just read your article on Hyperinflation and how it will happen here and man, thanks for the laugh. It's obvious we can add you to the ranks of people who have no f'in clue what the hell they are talking about re: the economy.

    I'll savage you some more on your hyperinflation thread.

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  7. your analysis is amateurish at best and dishonest at worst (i can't yet tell if you are a fraud though). Since you did not do your homework you have used apples to ranges comparison in your GDP figures (using one dollar base for 1940 and a different one for 1945 calculation). Maybe next time use something else than Wikipedia for your so called "research".

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  8. Come on Lira,

    I agree with Bradford. Lumping the Imbecile with Beck is quite deceptive or possibly naive. Critique the facts if you wish. You may disagree with Beck but at least he STRESSES that viewers/listeners should research on their own ALL THE TIME. Krugman, I've listened to him for years, is an elitist Progressive. He believes he is correct in all his assertions. The fool thinks himself as a God after receiving the Nobel Prize. I challenge you to break apart any facts Beck spouts. I've yet to see anyone honestly do so. And believe me, he is not the type to shoot from the hip w/o checking his research "six ways to Sunday".

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  9. What brought the US out of the Great Depression was the Emergency Price Control Act of 1942, as amended. This "Steagall Amendment," named for Chairman Henry Steagall, House Banking Committee, set parity pricing on most raw materials, mostly agricultural commodities, crude oil, steel, etc. The ONLY role WWII had in this recovery was it gave the Steagall Amendment political will, AND German and Japanese submarines provided tariffs that balanced our currency with the other currencies of the world.
    The Steagall Amendment can still save our bacon, that, and tariffs to BALANCE our currency against the currencies of other nations. The National Organization for Raw Materials can show us how to do it, just as the predecessors to NORM showed FDR and Congress in the '30's and '40's.

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  10. Excellent call-out! I have been using the "Krugman Test" for some time now as a means of sorting between sincere, uncompromised econ bloggers - those who do not link approvingly to the Krugster - and those who, whatever their other fine qualities, sacrifice some degree of intellectual integrity for earthly rewards.

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  11. 'I'll savage you some more on your hyperinflation thread.'

    'your analysis is amateurish at best and dishonest at worst (i can't yet tell if you are a fraud though).'

    It is interesting how anonymous posters are willing to 'savage' a named blogger in such a childish fashion, but completely unwilling to don a pen name (let alone their real name). Ah, internet anonymity.

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  12. Ok GL two suggestions to be followed in order; 1) stop shooting fish in the barrel. time better spent at things NOT being done to death everywhere. 2) disabled comments. your digestion will improve.

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  13. Krugman slam
    It was a great Krugman moment...and yes he did try to weasel his way out of it. He failed IMO.... but I never respected the court stenographer anyways(or is it court jester?) I think you should continue the comment section. You aren't doing a good job unleds you are pissing the American drones off.
    The funny thing about the brainwashed Krugman fan above is that he never seems to acknowledge the fact that the only reason America took such a prominent place in the world was because of the Bretton Woods agreement. Europe, Russia, Japan, and China lied in ruins. We have ridden the adgantage as far as we could.... now Asia has caught up to us... and times will be a changin. Moneyprinting or not. They are better educated, more driven, and have more capital. The writing is on the wall. Look East my friends... Look East.

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  14. Hi Gonzalo, good point. I don't think Krugman is stupid. He knows very well what he's doing with his warmongering innuendo in this article. He's nothing else than a front man pushing the worse intellectual trash manufactured by the creepiest fanatics at the Council on Foreign Relations.

    You may find this video by Peter Schiff tearing apart Krugman's column with sheer common sense and clarity.

    http://www.alanfurth.com/krugmans-warmongering-innuendo/

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  15. The dismal science, alright. WWII and its aftermath was such a unique, noncomparable event that you, Krugman, and perhaps even God herself have not clue how to interpret the data points. Yet you all have such firm beliefs. You are certain you read the signs correctly.

    Pshaw.

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  16. Good article Mr. Lira. And unlike a couple of others here, I understood what you were saying when you compared Krugman to Beck. Beck is a constant promoter of endless, harmful wars against an enemy that can ultimately never be defeated, i.e. terrorists. Krugman is the same way in that he "wars" against austerity by constantly promoting stimulus and spending which, little does he know, will ultimately result in horrific austerity and poverty in the future.

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  17. Who is looking at data points John? Certainly not me... I've been looking out the window. I don't live in DC or work on wallstreet.

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  18. I think Krugman is BOTH an imbecile AND a fraud!

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  19. Anonymous was dead wrong in his misrepresentation of Glenn Beck regarding wars. He rarely, if ever, discusses the various wars. He does, however, unabashedly discuss his support for the troops.
    I've found that all of these misrepresentations are done by people who never watch or listen to Beck. They listen to those who falsely misrepresent him instead. I listen to and watch his program every day. I suggest that people watch his program instead of believing the falsehoods about him. Only he is warning the American people about the people and agendas behind Obama.

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  20. If anyone would like to learn more about Krugman and the Austrian School of Economics check out this website:

    http://krugman-in-wonderland.blogspot.com/

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  21. http://www.shadowstats.com/article/hyperinflation-2010

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  22. I had the same reaction after reading your post as I did after reading Krugman's op-ed: why the obsession with the nominal percentages of debt rather than an analysis of the quality of that debt? In our personal lives of course we always make the distinction. Certainly any grown adult recognizes the difference between student loans to obtain a masters degree and an all-out creditcard maxing trip to Vegas. I would argue that kind of debt comparison is useful when discussing total government debt circa 1945 and 2010.

    True, the U.S. was the only industrialized country left in 1945, but Germany, Japan and others quickly rebuilt in the design and image of the U.S. ecomonic model. That's the key - the losers of WWII became U.S. eceonomic clones. The U.S. was the CEO of this model and enjoyed the huge advange of the Bretton Woods system. It's Bretton Woods that laid the foundation for decades of low-interest borrowing. This was a fantastic RoR on investment (WWII), when viewed selfishly from the U.S. perspective. Perhaps that RoR is rivalled only by the Louisiana Purchase. Also, how many technologies successfully commercialized from wartime technologies - radar, jet engines, nuclear technology - the list goes on and on. What did Gulf War I give us, the Hummer? I can't even think of any applicable technologies the Aftganistan and Iraq invasions gave us.

    And that's the central point. All aggregate deficit spending for the past few decades has zero RoR and I would argue is actually neagtive. Don't forget all our health follies - how about the ridiculous prescription drug plan that actually does nothing to make us healthier or more productive? Ditto all the extra spending on Medicare and Medicaid. "Health Care" continues to eat up more of our GNP and we have no idea how to stop that trend.

    For all of Krugman's insistance on more government spending, he never actually mentions anything specific that might grow the pie in the future. If you read his columns carefully - and I try to do this - all government spending is created equal. Spoken like a person who's never spent a day in his life in private enterprise.

    Let's stop the obsession with debt percentages. The U.S. won't go bankrupt because debt hit 90% or 120% or whatever. It will go bankrupt because the engine has stalled and the U.S. doesn't know how to move forward. By the way, I do believe the time has past to reverse course in the U.S. - our fate is sealed. The U.S. is no longer the spry 20 year-old with vigorous dreams for the future. We're the aging 70-year-old who's just trying to get through the day. Such are the cycles of life.

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  23. .."the only industrialized nation still standing"..

    Compare that with the fact that the US seized the globalization trend while abusing post-war technology advantage in 1963 while instating the world's biggest public-private partnership, the Dutch Gasunie (Exxon+Shell+Gov.nl), the rootcause of global distortion while coupling the price of (Dutch) natural gas to petrodollar warfare to recover war costs including the Marshall 'help'.

    "Atlantic Unbundling" is the only way out of global misery caused by American economic extremism:

    us.oil-gas.eu

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  24. So what is wrong in making the statement that US govmt borrowed twice the 1940s GDP? It certainly is not a lie, you may not like his policy prescription but don't call him a lier, and the GDP growth after the war was not due to commerce with Europe or Japan but internal demand for the most part. Where is your data showing trade with Europe/Japan or other country as responsible for rise in exports/GDP Professor? It was internal demand brought about by the deficit-financed expenditures of WWII. In other words, without it or other form of deficit spending (unfortunately politicians only seem to open the public wallet when they want to cause mayhem and destruction) it would not have happened. I guess you have missed some classes in your course, quite a few I would believe.

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    1. Wow. Gonzalo seems to be a liar. But wow. You really think the growth in GDP after the war was driven by internal demand?

      The GIs were paid from the debt the US went into, and they spent it earnestly when they returned. This is true.

      But the debt of the GI/public after the war was nil, far different than today.

      Where's your data showing the negligible export/balance of trade effect on GDP?

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  25. Paul Krugman's full quote is:

    "Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today."

    Your response:

    "United States’ GDP in 1940—before Pearl Harbor—was $101 billion, and by the end of the war, 1945, the Federal government had borrowed $250 billion. Apply simple math: That’s more than twice 1940’s GDP—closer to 250% of the gross domestic product. Of 1940. "

    So his statement was misleading - he understated the amount borrowed. It was actually 2.5 times, not 2 times. Which equates to closer to $35 trillion today, spread over the next 5 years.

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  26. You're misreading Krugman rather spectacularly. When he says "in order to do that, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble," that's dark humor, not a policy proscription. When he says "what must happen, I'd argue, is... effective default" that's a glum prediction, not a policy proscription. Other examples:

    http://krugman.blogs.nytimes.com/2010/07/28/were-number-one/
    http://krugman.blogs.nytimes.com/2010/03/16/alexander-hamilton-was-always-at-war-with-eastasia/
    http://krugman.blogs.nytimes.com/2010/07/02/im-gonna-haul-out-the-next-guy-who-calls-me-crude-and-punch-him-in-the-kisser/

    If you'd read enough of his work to understand his sense of humor and the way he expresses his malingering despair, this would be as clear as day to you.

    You also seem not to understand what he's saying about debt in WWII -- public debt was worked off in the postwar boom, but the depression itself was largely due to horribly indebted agents, and we were in liquidity trap territory while they all tried to pay it down at once. He's saying it was THEIR debt that was inflated away. For more on his perspective:

    http://krugman.blogs.nytimes.com/2010/09/11/one-model-to-rule-them-all/

    But most of all, you're misreading him on WWII. He knows full well that the rest of the industrialized world was devastated. He understands, however, that although a few manufacturers might have been happy to be free of foreign competition, devastated nations generally have a hard time affording their products. I don't know your qualifications, but Krugman won a nobel prize for his work in trade: maybe he's on to something?

    "5. International competition etc.. In general, having your trading partners reduced to rubble is NOT good for your standard of living, so the idea that postwar prosperity was made possible by the wreckage of WWII is odd. Anyway, the United States did very little trade in the postwar generation, relative to GDP. This was not an export-led boom."

    http://krugman.blogs.nytimes.com/2010/05/23/the-bestest-generation/

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  27. Gonzalo, everyone is entitled to their opinion and I can discuss all day the pros and cons of deficit spending with fiscal conservatives. However...

    Here's the imbecile Krugman answering your idiotic point about the US exporting its way out of the depression http://tinyurl.com/386hroc. Net exports were very low for most of the post war period and there was a temporary rise in 46-49...The Marshall plan years!

    Also, if you really think that someone with a PhD from MIT, an illustrious career at Yale, Stanford, MIT, and now Princeton, a Nobel Prize and Clark Medal winner, and the 13th most cited academic economist in the world is stupid, then you are either a complete moron or a jerk with insecurities. Take your pick

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  28. Back in the early '00s Tucker Carlson had a Friday evening talk show on public TV. On one of the episodes he interviewed Krugman. At that time Krugman was saying that Bush intentionally lied about Iragi WMD's in order to start the war and he wanted him impeached. Carlson asked Krugman for proof and this was Krugman's answer:

    THERE IS NO PROOF NOW BUT IF WE WAIT FOR PROOF, IT WILL BE TOO LATE TO IMPEACH HIM.

    He said that on TV. The man is a total phony and he thinks we are all idiots.

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  29. Was linked here by a Milton Friedman video on Youtube, so apologies for a late reply. I have two issues to take, though. First, you yourself somewhat misquote Krugman in your piece. Krugman very readily acknowledges that the deficit spending occurred over the course of the war, not solely in 1940 (your quote had me thinking that was his assertion). Secondly, Krugman's point is clearly that exceptional deficit spending - at amounts that would have likely seemed impossible had you mentioned them in 1940 - were probably largely responsible for the growth in GDP by 1945. In fact, Krugman says that right after the statement you so protest: "Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today."

    Point being this: Krugman is saying that if anyone proposed today doubling the deficit (to $30b) over the next 5 years (with GDP at roughly $15b), it would sound absurd. It is absurd. But if it came with a thought of perhaps GDP of $60b - it might not seem so silly.

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  30. Gonzalo,

    I despise Krugman.

    However, I stopped and fact checked your piece; thanks for the link by the way.

    You quote PK's "government borrowed an amount equal to roughly twice the value of G.D.P. in 1940" but it is a cherry picked quote.

    Here it is from the beginning to end "Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today."

    By saying "over the course of the war" PK's statement is factually true.

    By you leaving out that fact, you engage in what you accuse PK of engaging in; namely sneaky semantics.

    I noticed as I scrolled down some other folks pointing out the same quote.

    Here's the thing Gonzalo. You hope for acknowledgement of your work via a small donation through PayPal.

    But why would I do so? You lie.

    As you might imagine, although I agree with the point your argument makes, and although there are facts about the calculation of GDP and the rebuilding requirements after WWII that could support your position, I will NEVER give you a dime.

    PK is scum.

    You seem to be scum too.

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Whether you agree with me or not, thank you for your comment.

If you liked what I wrote—or if it at least made you think—don’t be shy about making a payment. The PayPal button is there for your convenience.

If you have a question or a private comment, do feel free to e-mail me at my address expat229@gmail.com.

GL