Friday, November 27, 2009
Paul Krugman can’t stop debunking his former hysterical self.
Paul Krugman gets the creeps from a "big piece on the front page" of his own newspaper that warns “Wave of Debt Payments Facing U.S. Government”. His response...
Ah ... but remember who was leading the flight into hysteria not so long ago, urging us all to be afraid, very afraid: his very self!
Yet today, with the the long-term budget situation much worse, he switches to bashing debt hysterics like his former self -- and supporting Obama's renewal of the bulk of the Bush tax cuts. Hey, interest rates aren't likely to increase soon; and in the longer run the debt held by the public won't be any larger in 2019 than it was in 1950 for Ozzie & Harriet, and things worked out fine for them. Oh, and European nations are carrying that much debt already without the roof falling in on them, so what’s to worry?
(More detail: Krugman versus Krugman.)
"But, Paul, because of the future liabilities of Social Security and Medicare, isn't the true budget picture much worse than these conventional deficit numbers suggest? Making it simply impossible to cope with the fiscal implications of the aging population?"
"What? What?"
Here all the Krugmanista apologists rush to interject, "Hey, before he was talking about the long-term budget mess (created by the Republicans) but today he is talking about short-term deficits desperately needed as a stimulus in the Great Recession."
Sorry, no dice.
Krugman the deficit hysteric wrote that he was "terrified" about "what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits".
Krugman the deficit Pollyanna trashed a Times story that wrote:
When Hysteric Krugman wrote that he was protecting his home from “the looming threat to the federal government's solvency” he was talking about the end years of his mortgage -- the 2020s.
When Pollyanna Krugman compares 2019 to 1950, and writes "I haven’t heard that anyone considered America a debt-crippled nation when JFK took office," he's comparing the 1950s to the 2020s. Same time!
Hysteric Krugman wrote about entitlements in the 2020s...
Great! It seems we’ve found the remedy for the Bush tax cuts making it "simply impossible ... to cope with the fiscal implications of an aging population": Renew the Bush tax cuts when they expire as the Obama-Democratic tax cuts, and forget that the implications of an aging population exist!
Pollyanna, short-term Krugman says to look at how all these other European nations can have more debt than the US without being hurt so far as they head towards their own retiree funding crises. OK, but we might also want to look at some of their projected future sovereign credit ratings.
As to the US, before the recession and the arrival of all this new debt, with 2007 as a base line, to keep up with the exploding entitlement spending costs Krugman now ignores, we were heading towards needing a 50% across-the-board income tax increase (or the equivalent) by 2030, to keep the US from taking its spot on that chart. Now it’s worse.
The bottom line here is: either Krugman made a bad mistake in refinancing his mortgage for fear that the "banana republic" politicians of the 2020s will turn to "printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar", or he didn’t.
Hysteric Krugman wrote: "I've done the math, and reached my own conclusions": that banana republic fiscal calamity is coming before his mortgage runs out.
But now Pollyanna Krugman has re-done the math -- with trillions of additional debt added into the equation -- and claims it says the 2020s figure to be the happy days of the 1960s all over again.
That’s some special kind of math!
(It’s almost as if mathematical results depend on whether or not deficits are being directed by Democrats on spending Krugman that likes, such as creating an entire new major entitlement. Is that too cynical?)
But really, one can't do the same arithmetic for the same date and come up with two such radically different results.
At least one of those results has got to be a mistake (if not political propaganda).
Which do you think it is?
Deficit hysteriaAlthough he gives it to us (again and again and again and again) in his ongoing campaign to fight hysterical fear of surging government deficits and the ever-growing national debt.
Urg. Big piece on the front page saying that, on the one hand, some people say that we’re going to have a debt crisis any day now, while on the other hand ... well, actually we never hear from the other side...
Ah ... but remember who was leading the flight into hysteria not so long ago, urging us all to be afraid, very afraid: his very self!
I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits... we're looking at a fiscal crisis ... a looming threat to the federal government's solvency.Thus explaining why he paid good money to refinance from a variable-rate into a fixed-rate mortgage -- to save his home from the coming "banana republic" fiscal calamity!
That may sound alarmist: right now the deficit, while huge in absolute terms, is only 2 , make that 3, O.K., maybe 4 percent of G.D.P.
But that misses the point ... because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest.
... the conclusion is inescapable. Without the Bush tax cuts, it would have been difficult to cope with the fiscal implications of an aging population. With those tax cuts, the task is simply impossible. The accident, the fiscal train wreck, is already under way.
How will the train wreck play itself out? ... my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar.
... investors still can't believe that the leaders of the United States are acting like the rulers of a banana republic. But I've done the math, and reached my own conclusions -- and I've locked in my rate.
Yet today, with the the long-term budget situation much worse, he switches to bashing debt hysterics like his former self -- and supporting Obama's renewal of the bulk of the Bush tax cuts. Hey, interest rates aren't likely to increase soon; and in the longer run the debt held by the public won't be any larger in 2019 than it was in 1950 for Ozzie & Harriet, and things worked out fine for them. Oh, and European nations are carrying that much debt already without the roof falling in on them, so what’s to worry?
(More detail: Krugman versus Krugman.)
"But, Paul, because of the future liabilities of Social Security and Medicare, isn't the true budget picture much worse than these conventional deficit numbers suggest? Making it simply impossible to cope with the fiscal implications of the aging population?"
"What? What?"
Here all the Krugmanista apologists rush to interject, "Hey, before he was talking about the long-term budget mess (created by the Republicans) but today he is talking about short-term deficits desperately needed as a stimulus in the Great Recession."
Sorry, no dice.
Krugman the deficit hysteric wrote that he was "terrified" about "what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits".
Krugman the deficit Pollyanna trashed a Times story that wrote:
The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. But that happy situation, aided by ultralow interest rates, may not last much longer ... interest rates are sure to climb back to normal [when] the emergency has passed...Both are talking about a future of normal times -- except for huge debt. Nobody doubts deficits can be financed today at low short-term cost. The issue is the long-term implications of debt fast growing from huge to huger, after the recession is over.
When Hysteric Krugman wrote that he was protecting his home from “the looming threat to the federal government's solvency” he was talking about the end years of his mortgage -- the 2020s.
When Pollyanna Krugman compares 2019 to 1950, and writes "I haven’t heard that anyone considered America a debt-crippled nation when JFK took office," he's comparing the 1950s to the 2020s. Same time!
Hysteric Krugman wrote about entitlements in the 2020s...
Without the Bush tax cuts, it would have been difficult to cope with the fiscal implications of an aging population. With those tax cuts, the task is simply impossible. The accident, the fiscal train wreck, is already under way.Pollyanna Krugman writes about these entitlements in the 2020s ... um, not a word, nor here, nope, nope, nope.
Great! It seems we’ve found the remedy for the Bush tax cuts making it "simply impossible ... to cope with the fiscal implications of an aging population": Renew the Bush tax cuts when they expire as the Obama-Democratic tax cuts, and forget that the implications of an aging population exist!
Pollyanna, short-term Krugman says to look at how all these other European nations can have more debt than the US without being hurt so far as they head towards their own retiree funding crises. OK, but we might also want to look at some of their projected future sovereign credit ratings.
As to the US, before the recession and the arrival of all this new debt, with 2007 as a base line, to keep up with the exploding entitlement spending costs Krugman now ignores, we were heading towards needing a 50% across-the-board income tax increase (or the equivalent) by 2030, to keep the US from taking its spot on that chart. Now it’s worse.
The bottom line here is: either Krugman made a bad mistake in refinancing his mortgage for fear that the "banana republic" politicians of the 2020s will turn to "printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar", or he didn’t.
Hysteric Krugman wrote: "I've done the math, and reached my own conclusions": that banana republic fiscal calamity is coming before his mortgage runs out.
But now Pollyanna Krugman has re-done the math -- with trillions of additional debt added into the equation -- and claims it says the 2020s figure to be the happy days of the 1960s all over again.
That’s some special kind of math!
(It’s almost as if mathematical results depend on whether or not deficits are being directed by Democrats on spending Krugman that likes, such as creating an entire new major entitlement. Is that too cynical?)
But really, one can't do the same arithmetic for the same date and come up with two such radically different results.
At least one of those results has got to be a mistake (if not political propaganda).
Which do you think it is?
