printA reader has forwarded a recent editorial by Paul Krugman, “Mugged by the Moralizers.” Attached was the following incredulous note:
“[This editorial] is the perfect inversion of morality and logic, in the name of justifying taking money from people to give it to other people.
It is so calm and composed a statement of the credo of cave dweller-takers by force that I felt obliged to pass it along as a perfect exhibition piece. I’ve never seen anything so useful like this. Maybe he decided to let all the stops out in the days before the election.”
Leave aside the moral void, you can drive a 4X4 through Krugman’s logical lacunae:
For example: The idea that there is a spending “hole created by the debt overhang” that has to be filled, or else: this is merely a theoretical/political construct. That’s all. It is not necessarily true; it doesn’t necessarily comport with reality.
And: “If one group of people — those with excessive debts — is forced to cut spending to pay down its debts, one of two things must happen: either someone else must spend more, or world income will fall.”
That follows only if the fallacy upon which the Krugman fatuity is premised is true. And it isn’t. His assertions most certainly don’t exhaust the possibilities. Less spending could also mean more saving. More saving would translate into investment and, eventually, production—these are the wellspring of prosperity.
How many times must Krugman’s absurd theories fail in practice before people stop listening to him? When America regresses into a Third World kleptocracy? When the New York Times finally goes under?
KRUGMAN: “If one group of people — those with excessive debts — is forced to cut spending to pay down its debts, one of two things must happen: either someone else must spend more, or world income will fall.”
PAULI: So instead, counterfeit money to increase spending. Thus world income rises – but in units of watered money. Water down the milk and everyone can have a glass!
KRUGMAN: So what should we be doing? First, governments should be spending while the private sector won’t, so that debtors can pay down their debts without perpetuating a global slump.
PAULI: Well, the government is fabricating $ 1,400,000,000,000 to bomb Pustuns, keep GM alive, ethanol subsidies, and Bridges to Nowhere. What has that bought us other than a housing bubble and investors too scared to invest?
KRUGMAN: Second, governments should be promoting widespread debt relief: reducing obligations to levels the debtors can handle is the fastest way to eliminate that debt overhang.
PAULI: So why would anyone lend to people who can get away with defaulting? HOW does the government “reduce the obligation” – by magic, inflation, what??
“IN THE BEGINNING, THERE WAS GOVERNMENT AND GOVERNMENT CREATED MONEY AND THERE WAS MONEY AND IT WAS GOOD!!!”
Our whole economy/culture has for so long been taking money away from the people who earn it and giving it to the people woh don’t we now seem to think that’s the natural way of things. Phoney intellectuals like this Krugman character actually believe this drivel.