Paul “one-note” Krugman still pushing for more stimulus
Krugman’s latest approach to demanding more deficit spending – er, excuse me, “stimulus” spending – centers on the impending election. The Democrats wouldn’t be about to see an electoral tsunami if they’d just listened to him and spent more. The economy would be recovering and we’d only be talking about nominal losses in the mid-term as is historically the case with just about every President.
The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.
And he further states:
If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself. Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect.
In fact, when you look back at the spending forecast that accompanied the Obama plan, you’ll find something very strange (as we’ve pointed out before). You’ll find that it spent more than Mr. Krugman said was necessary at the time:
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
It should be huge, huge I tell you! $600 billion at least. We ended up with $900+ instead new figures show. It was 50% bigger than Krugman called for but, now, it was “totally inadequate”.
If you, like me, have essentially turned off the one-note bleat from this guy it is because other than calling for more spending he never, ever reviews his work or analyzes the results of someone actually following his advice. It was huge, it was more than he asked for, and it FAILED.
Has that sunk in yet, Mr. Krugman – your suggestion was less than what was spent and the result was an increase in unemployment and a decrease in economic activity. That, to most, means the idea of a “huge” amount of deficit spending did not have the effect you and the administration claimed it would. It. Failed.
Unlike Mr. Krugman, most of us have come to terms with the Einstein definition of insanity and resist doing the same thing over and over again expecting different results.
Obviously that’s not the case with Mr. Paul “one-note” Krugman. Tuning him out is a perfectly acceptable reaction to his ceaseless call for more deficit spending.