Who would have thought that New York Times readers could do such a terrific Peter Sellers impression?
Paul Krugman, once a Nobel Prize winner, now the very model of a modern progressive hack, issued his contribution to the current “Protect Joe Biden!” hysteria among pundits and journalists. It’s called “Why You Shouldn’t Obsess About the National Debt,” and if this won’t get the Nobel people to demand their prize in economics back, nothing will.
The intellectual dishonesty of the piece is stunning even for Krugman—I remember how an old friend favorably posted one of Krugman’s columns to Facebook and the scales fell from my eyes making me realize that the old friend was an idiot and had always been one—and the rationalizations he uses to shrug away the $34 trillion national debt are breathtaking in their audacity. Some examples:
- “[I]t’s a lot less scary than many imagine if you put it in historical and international context.”
- “[I]t’s almost entirely a political problem.’
- “Today, debt as a percentage of G.D.P. isn’t unprecedented, even in America: It’s roughly the same as it was at the end of World War II.”
- Here’s a Rationalization #22! “It’s considerably lower than the corresponding number for Japan right now and far below Britain’s debt ratio at the end of World War II.”
- “Bear in mind that governments, unlike individuals, never have to pay off their debt.”
- “Given the political will, we could resolve debt concerns quite easily.”
This is manifestly BS, published to try to duck one more failure of Krugman’s favorite party by throwing metaphorical dust in the public’s eyes. Remarkably, for once, Times readers, who usually are more vulnerable to the Times’ dishonest propaganda, reacted like Ian Malcolm…
Most of the comments on Krugman’s column were like these:
- “Except when Trump was president you obsessed about it all the time.’
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“I love these columns in which the author explains why you — his readers — shouldn’t be worried about this or that looming disaster. Why believe what you otherwise read, or your actual experience, or your common sense, when you have his wisdom to guide you? The astounding thing is that some readers actually fall for it.”
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“What debt? What inflation? Krugman is the Reverse Moneybuster. He turns real economic problems into ghosts.”
- “Oh look, another grey boomer claiming the debt they created isn’t a problem… correction, it’s not your problem.”
- “The INTEREST the US pays on this debt is approaching $700 BILLION a year. That’s more than the defense budget. You’re saying this isn’t a problem? How many social problems could be funded with this money? Student aid? Veteran aid? Rental and homelessness assistance? Instead the money is being thrown down the toilet. This column is absurd.”
- “Key word: Inflation. People lose, government wins. Government actually likes it when there is inflation. Yes, your wages go up sometimes but government debt goes down commensurate to inflation. That’s why guys like Paul here is employed. He rationalizes inflation. He is the Alfred E. Neuman of money thinking. “Who me worry?”
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“So – it’s not that high compared to the exit from WW II – you know – 80 years ago? Trying to imagine a student paper submitted to the good professor that cherry-picked data points in such a manner.”
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“’Today, debt as a percentage of G.D.P. isn’t unprecedented, even in America: It’s roughly the same as it was at the end of World War II.’ This is the most disingenuous statement I’ve read in a long while. Government debt spiked back then because, wait for it, we were fighting in a WORLD WAR. Just click on the link in the text to see what Dr. Krugman’s words are hiding. We are at WW2 levels of debt right now without being in a hot war right now.”
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“‘Why You Shouldn’t Obsess About the National Debt’…..’cuzzzzzz a Democrat is in the White House? Watch this space! The national debt may become a problem again next January 20.”
Which again shows that Lincoln was right. Sometimes you can’t even fool all of the people who want to be fooled.
Ethics Alarms 
Paul Krugman and that goofy Jack Smith special prosecutor guy share the same crazy zealot eyes.
Krugman should team up with Biden’s chairman of the Council of Economic Advisors, Jared Bernstein. He has a degree in music, and a masters and doctorate in social work, so obviously a prime source of economic expertise.
Bernstein on money (jump to about the one minute mark if you just want the best part):
https://www.youtube.com/embed/tpXBB09ze_U
Krugman may be wrong about this–I tend to think the national debt is a bigger problem than he does, for the reasons you cite. But I’m not sure you can call him a hypocrite. I don’t remember him making a big deal of the debt under Trump. I remember him calling bullshit on Trump’s ability to claim he was some kind of budgetary hawk, and pointing out that, once again, the GOP was obsessed with the debt when Dems were in the WH, and not caring when a Republican was. Indeed, the debt has grown far faster under GOP presidents than under Democrats in the last 50 years, but the Dems are blamed for it more by the voters. But again, I don’t think you can say that Krugman was warning that the debt was dangerous under Trump, which is what you are saying. He’s been pretty consistent, as far as I know.
The irony of Krugman is that when he was hired, many on the left thought he’d shill for neoliberalism, and instead, he’s turned into a critic of obsessive market thinking in policy matters. He’s still pretty strongly for free trade, which dovetails with some of his academic research. He has an extraordinary record as an economist, and very much earned that Nobel prize.
and very much earned that Nobel prize.
That is indisputable. It was also a long time ago, and a disturbing number of legitimate Nobel Prize winners have morphed into crackpots. The worst aspect of his column is the common unethical trick of advocating a solution to a problem that is realistically impossible. It’s easy to solve the debt, he says, as long as the two parties would agree to cooperate before a crisis, which, of course, as he well knows, they won’t do. Thus the easy solution he says is waiting isn’t a solution at all. If the only solution to a problem is practically impossible, then it is unethical to argue, “We don’t have to worry about this because we can fix it whenever we want.” That’s a lie. In such a case, the only way to address such a problem is to avoid making it worse, and that only happens when we agree: “This is worth worrying about.”
The parties have never come together to work on the debt. The debt has never gone down for an extended period (except when Andrew Jackson killed the Bank of the United States.) It went down slightly right after WWII, but was back up over that amount in a few years. It’s only going to happen when the US collects more in taxes than it spends, and that’s political suicide. If the parties wouldn’t do anything about it when the debt was more manageable, why would anyone think they will do it now? Reduced spending plus higher taxes triggers a recession. Biden’s trying to buy votes with craziness like the student loan bail-out…every election cycle, the parties do that stuff. Hope is nice, but this particular hope is like hoping for world peace.
My point in the post was that the Times readers didn’t buy Krugman’s spin. I didn’t cite any of his comments as hypocritical; several commenters did. Since I don’t read Krugman any more unless someone makes me, and that first comment I quoted was also the first comment made AND was approved by about 190 readers, I assumed they were regular readers who knew more about his record than I do. All of his columns are online—I could check, but really, Krugman is irredeemable. He has a huge Ethics Alarms dossier: my favorite might be when he wrote that Eliot Spitzer frequenting a prostitution ring as Governor wasn’t “disqualifying” despite his getting elected governor in part because of his prosecuting—prostitution rings!
“Crackpot” works for me.
He’s as looney as his office neighbor, Maureen Dowd. Familiarity in the NYT seems to breed inanity.
I won a bet with myself that “A Friend” would issue an unauthorized comment here (now sent to spam hell) to say “I told you so!” because his one-trick pony is insisting that the Times’ bias and slanted reporting is offset by reader comments. 1) It isn’t: nobody cites a reader as an authority in a debate over policy; 2) Usually the readers reflect exactly the same biases as the Times and 3) almost nobody but Ann Althouse and “A Friend” takes the trouble to read the damn things. I have a sock drawer crisis…
Of course that isn’t even remotely what I said. I don’t have a one-trick pony about the NYT comments. My whole thing about the New York Times starts with the ARTICLES there that Jack usually never mentions, such as the very next topic here on the Zeynep Tufekci piece, which follows on the giant takedown of extended school closures supported by the AFT published months ago in the NYT which is contrary to the thesis that the Times is the Axis of left-wing this-and-that. And then, yes, the NYT comments, which it took two years to convince Jack to even open up. This is the whole problem of banning commenters, he can then assert whatever he wants to assert that the banned commenter said. Would you all not agree this hypersensitivity is far more typical of liberal writers, i.e. political correctness, which I hate too! Incredible.
The dollar value of the debt seldom declines, true. But the % GDP is the metric that best measures the national debt. While I hate the old politician’s metaphor of the national budget to a household budget, in this limited sense, it’s instructive. If I have a debt of 1 billion dollars–based on current income and my wealth, I’m F*cked. But Bill Gates would be fine.
So the %GDP of the national debt has declined sometimes and the %GDP to DEFICIT has greatly declined on occasion. It’s not quite cooperation, but the gridlock of 94-00 was great for the debt/deficit. Republicans couldn’t get the tax cuts they wanted, Dems couldn’t get the spending increases they wanted, and so…our fiscal situation improved. Credit should be shared among Gingrich and Clinton (with some going also to Dole in the Senate, one of the last great non-supply side fiscal hawks).
Inflation makes the debt look better. How ironic!
Also–if inflation is your issue–what is Trump’s plan for fighting it beyond vague statements about cutting the size of government, which, given that
You’d have to be particularly gullible to believe.
Also, two of his centerpiece policies, tariffs and crackdown on immigration are absolutely inflationary, and no respectable economist would tell you otherwise. Our relatively large pool of immigrant labor is one reason our economy came roaring back so much faster from the pandemic than many comparable economies. If we reduce illegal immigration, employers will have to pay a lot more in wages, thus boosting the price of goods and services. Similarly, tariffs exert an upward pressure on prices in two key ways. So…if inflation is the #1 issue for you, I think a vote for Biden would make the most sense. (noted, of course, that Biden is only somewhat better on tariffs than Trump AND Biden is more recently cracking down on immigration. But it would be hard to argue that 2nd term Biden is going to be imposing more tariffs and restrictions on immigration than Trump would in his 2nd term.
You must know that inflation’s not my issue.
Sorry, it was a general “your” not directed at YOU, but I can see why you assumed that. I meant “if anyone is going to vote for Trump because of inflation, that doesn’t make a lot of sense.” I’d also add that our inflation has been lower than that in many other industrialized democracies, and our GDP growth post-pandemic is epic compared to comparable nations. You can’t blame Biden for inflation in other nations, or at least not much. There was ALWAYS going to be an inflationary situation coming out of a pandemic for which the global policy response was pump priming ie Keynesian spending. A lot of money, waiting to be spent, on a smaller than usual amount of goods and services…textbook. Add to that supply chain problems globally, Ukraine war, the removal of sizable portions of Russia’s fossil fuel capacity from world markets, etc. It’s remarkable inflation globally wasn’t worse!
You know your political history, so you know that Presidents and their parties are held responsible for economic downturns that happen on their watch whether they really could have done much about it or not. (The Great Depression was hardly Hoover’s fault; the 2008 mess was a bi-partisan disaster, gas prices under Carter, etc., etc…) It doesn’t endear Biden to anyone when he says inflation was higher when he came into office, a flat out lie.
Jack
Abrupt reductions in spending and increased tax rates trigger recessions. You can reduce spending by increasing the income threshold for new applicants for entitlements and higher revenues from real growth or inflated dollars without raising rates.
We have to stop saying that smaller increases in spending are “cuts” in entitlements. Weaning working age people off government transfers can be accomplished by not providing them in the first place. Intergenerational poverty is a condition created by federal and state entitlements transfers that lead to learned helplessness.
Childhood poverty rates would drop if the incentives to have more children – their subsidy is tied to family size- is capped and based on a fixed family size of 3 children. That provides enough for replacement + 1. It also creates a financial incentive to have fewer different fathers.
It is possible to create a plan in which total outlays finally intersect total receipts and we have surpluses to reduce the debt.
Every federal transfer anti- poverty program should have some form of limit on duration. The idea that people should be considered unable to learn how to eventually provide for themselves is either racist because it assume some need a benevolent superior being taking care of the recipient and want them subservient or they don’t give a damn about people they just want to use human behavior to help them stay in power.
“That is indisputable.“
Apparently it wasn’t.
https://austrianeconomists.typepad.com/weblog/2008/10/you-cannot-be-s.html
“Indeed, the debt has grown far faster under GOP presidents than under Democrats in the last 50 years, but the Dems are blamed for it more by the voters. “
I know you know that the debt is a function of Congress and not the President. Who controlled Congress during those periods when deficits grew larger. More to the point, it is the GOP who is blamed for shutting down the government when the debt limit is reached when they want to curtail spending; which of course is hyperbole. Moreover, to get their way the Democrats actually spend more money to inflict as much pain on the public when the government is partially shut down. Obama placed barriers around the open air WWII memorial when such shut a downs did occur. In the end, furloughed federal workers never lost a dime from a paycheck from s shut down. They just got more vacation time.
It is true that Presidents push for various policies but it is Congress who set tax an spending levels. Increases in debt from that which presidents push are function of growth in government entitlement programs under Democrats and tax reductions and defense spending under Republicans.
Entitlement and interest spending is what is driving the growth of our debt because even with the tax rate reductions under GOP presidents revenue growth rose. We have a spending problem Houston.
As for that Nobel prize: Keep in mind the committee gave the Peace Prize to Obama before he did anything. Obama then went of to bomb more countries than his predecessor. The prize committee is not infallible
It’s been a while since I looked, but debt and deficit growth has a very weak correlation with the president’s party. The president gets both blame and credit for something that’s largely outside of his control. The party control of the house has a better claim to influence, but there’s so many confounding factors I don’t think it can reliably be ascribed to either major party. Among other things, you can’t rule out the effects of state actions such as extended lockdowns on tax revenue.
Obama’s Peace prize was a joke. They’d never given out a prize before for simply NOT being someone. They were really trying to reward America for (apparently) rejecting Bushism. BUT–it’s worth noting that it’s two very different committees–operating actually in two different countries!
As for your structural point: Yes, in the constitution, the budget power belongs to the congress. BUT–that has radically changed. With the invention in 1921 of the Budget Office, the president became the first mover in the budget process. Also, presidents acquired a vast staff of economists and budget officials when it became the OMB under Nixon. Congress responded by creating its own CBO, but today, the president’s budget sets the broad parameters on spending and taxes, the Congress debates the details (or doesn’t–the process is really broken) and the president is involved in that debate with veto threats and so on, and then…the president can veto the final result. So to say it is CONGRESS that is responsible is as afactual as to say it is the President. It’s both. BUT–in the public mind, and in the mood of the post–we were talking about presidents. My guess is, though, that you’re right. The growth in the debt under Democratic controlled Congresses is probably greater but it could instead be pretty close to even. What IS known, though, is that if you want to reduce the debt/deficit, vote for a Democrat for president.
As for debt ceiling–that’s a historic accident, and a really bad policy idea. We should get rid of it. No other major country has such a thing. Even intellectually, it’s stupid. You have money you have voted to spend. You spend it. Then, you decide if you are going to borrow the money because you didn’t allocate taxes capable of covering it? You voted to spend, and now the options are–borrow or…destroy the dollar and cause global economic catastrophe?
Yes, the Peace Prize has discredited the whole Nobel brand (with the literature prize not too far behind). It’s unfair and unfortunate, but the Peace Prize has always been the most famous and publicized, so more care should have been applied to keep it credible and consistent with Nobel’s intended mission.
“What IS known, though, is that if you want to reduce the debt/deficit, vote for a Democrat for president.”
Whoa. The last surplus we had in the last 80 years did occur during the Clinton administration but you forgot that that occurred in his last term and when Gingrich clamped down on his spending toward the end of his first term when he was forced politically to tack toward the middle to win reelection in 1996. I will point point out that he did so somewhat through welfare reform that required recipients to work or get training and the omnibus crime bill that cut eliminated federal expenditure for inmate education in state institutions. Joe Biden pushed that part. I have first hand knowledge of that issue. During the Bush I &II years the debt rose at a rate of about .5T annually. When Obama took office the rate of growth took off, doubling to a bit over 1.2T annually. Under Trump, the average up to the pandemic mirrored the amount of average increases under Obama. But for the pandemic, in which over 50% of the economy was shuttered by all those telling us to follow the science, Trump added 4T in his last year to the debt that was to fund R&D to develop the vaccines, help auto makers retool operations to manufacture provide respirators and provide help to keep as many people on payrolls as possible. Under Biden he has added 6.22T in his 3 years without the economy shut down compared to Trump’s total increase of 7.372T with the pandemic costs. (I am using 4qtr data from treasury beginning with FY 1992.
The increase in debt is a function of nondiscretionary spending which comprise many anti-poverty programs that do not seem to wean people off them any more. I will give the Clinton administration credit for agreeing to changes resulting in welfare reform.
Democrats tend to spend money on what I will call “people programs” or nondiscretionary programs that always tend to increase over time and require an act of Congress to end. while Republicans tend to spend money on discretionary programs specifically national defense. Both use Omnibus legislation to fund their pet projects in their districts. Such legislation tends to corrupt the process because legislators cannot be seen as voting against legitimate bipartisan bills if they vote against the pork nor do they want to have to justify their own pet projects.
Back to history. In 1969 the ratio was 36.2% and when Nixon was forced from office it 30.2 %. During the Bush I years In the first quarter of 2009 debt as a % of GDP was 49.7% and rose to 62.8%. Clintons term saw an initial rise in his first term maxing out at 64.2 and then fell in the second term to 55% by virtue of the fact that Gingrich had the ability to override any veto threat. During Bush II the ratio climbed from 55% to 77% but two major shocks occurred during that time: The attack on the World Trade centers and the collapse of the housing market in 2008. The latter could have been averted had the Democrat controlled Congress not rejected reforms in Fannie Mae and Freddie Mac. If I recall correctly it was Gerald Nadler who prevented reforms from occurring. Ironically, such reforms would have prevented many from getting loans they could not pay back. Under Obama the ration went from 77% to nearly 105%. That is far greater an amount both in percentage increase and nominal dollars under previous administrations. By the time Trump took office it had risen to 104.6 by the end of quarter 4 in 2019 when the pandemic took off it risen only to 104.7. Because of the pandemic it shot up to 132% because GDP fell precipitously and the annual debt increase rose three fold. Ultimately though, you cannot have an unlimited debt ceiling for any given lever of GDP. The same issues that get households in trouble will get governments in trouble. Someone eventually has to establish a maximum debt to GDP amount.
I have no difficulty with using % of GDP as the metric for establishing what is appropriate. But we should not forget that GDP is the amount of total production value and not Government receipts. I don’t think a bank would approve a loan based on the total neighborhood income.
The surplus was a lucky bi-product of the dot-com boom, which disappeared almost as quickly as it arrived, and had nothing to do with either party or Clinton. Clinton still gets credit under the same rules that assign Biden responsibility for the soaring debt now.
Something like the first surplus since LBJ is unlikely to be monocausal, right? I agree the dotcom boom was essential, but so was gridlock. The GOP in Congress was pushing hard for spending reductions in some areas (not hard enough in ag subsidies, one of the great broken promises of the Gingrich era–the so-called freedom to farm act. We STILL should end all agricultural subsidies–immediately) and the Dems in Congress were pushing hard for no domestic cuts at all, and Clinton DID play a role, via triangulation, in the gridlock that prevented GOP tax cuts and Dem spending on domestic agenda.
My point was not that it is automatic–that every Democratic president leaves the debt situation better than every GOP. Just on average, over the last 50 years, as this link shows–the Dems do better. It’s truly quite complicated, and Congress, global economic factors, and foreign policy, such as wars, always play a role. Imagine a world in which we didn’t invade Iraq? Or one in which GW Bush had raised the gas tax to pay for our 9-11 wars (this was the first time we went to war solely on borrowing, without any tax increase at all–turns out, bad idea)
The big drivers under GOP presidents recently have been wars and tax cuts. We are told, over and over, that tax cuts increase revenues. That’s only true when moving from very high rates like 70-90, and only if there is dynamic behavior changes and pre-change cheating that is reduced after the tax cut. It doesn’t seem to work in moving from say 39% to 34%. Having one party believe, fervently, that tax cuts INCREASE revenues is one of the biggest drivers of our debt crisis. Why ever raise taxes if you think tax cuts increase revenue? So having an entire political party in a two party system believing in the Easter Bunny is a problem. Back in the “classic” Congress era, both Ds and Rs in Congress were the checks on presidential desires for massive programs. It’s weird to think about now, but it used to be the case.
And the entitlement programs, for the most part, are NOT poverty fighting programs that failed–it’s Social Security and Medicare that are the gorillas of the budget process. Those are, by design, programs that the poor, middle class, and rich all take part in. Aid to families with dependent children, Medicaid, the classic safety net programs, are not nearly as large.
Bush and the GOP Congress not having the guts to raise the gas tax drove me crazy, as did cutting taxes while fighting two wars. Indefensible.
Yeah, the gas tax is one of my constant views. I was for John Anderson in 1980, even spoke on his behalf in a mock election in 7th grade (he got 148, barely losing to Carter 158, with Reagan taking 21, here in the People’s Republic of Arlington). Anderson’s biggest position was raising the gas tax dramatically. It was always intended to pay for Federal Highway funds, but was never indexed to inflation so kept losing ground. Also, higher gas tax reduces dependency on foreign oil, subsidizes public transportation indirectly, encourages walking AND is one of the most efficient and hardest to dodge taxes in our country. It is, unfortunately, regressive, and also has a disparate impact on rural states and areas. But nothing is perfect.
Link here:https://www.self.inc/info/us-debt-by-president/#history
Also the belief that reducing the national debt or deficit will reduce inflation, at least in wealthy countries, seems to lack data support. Yes, Weimar Germany, Argentina in most of the 20th century, and any number of African countries writhing under state centered socialism are good examples of how printing currency like the energizer bunny on meth produces inflation. But the data for the US, and similarly situated countries, is far less conclusive.
https://www.morningstar.com/columns/rekenthaler-report/government-debt-inflation
You do recall that the rising star of the Democratic Party, Dunning-Kruger victim Rep. Ocasio-Cortez, told her avid supporters that the debt was no problem because all we had to do was to print more money.
And the regulatory state is always unleashed under Democrat administrations which invariably cripple the economy.
Nadler and Frank both were responsible for scuttling Bush 2’s lending reforms for Fannie and Freddy
Don’t forget Ted Kennedy.