…I know there are so many to choose from.
Some people have said it’s unfair to pick on Krugman so much. After all, it’s just a little tactless to make fun of the kid on the short bus. True. But as Krugman is actually dumb enough to say what many liberals believe (but are at least smart enough to not say) his words offer a good look at why modern liberalism really does belong on the short bus. I’ll try and diversify.
“Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
This is, however, a really bad analogy in at least two ways.
First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.”
I’m beginning to see the problem. So apparently governments don’t ever have to pay back their debts. I don’t about you but I’m never buying a government bond endorsed by Krugman. And what is he talking about, American families don’t have to pay off their debt either, they have government bailouts to do that! And you know he’s right… governments like Greece, Italy, Spain, China and the People’s Republic of California aren’t going to have to pay off their debts. Why? Because they’re going to file for Chapter 11 and destroy not only their economies but the economies of anyone even remotely connected to them in the short run (in a globalized economy like the one we now live in read EVERYONE). Why worry about paying off your debts when you can trash not only your economy, your capital markets, your employment rates and your currency but everyone else’s as well!
But you have to love how he justifies this little bit of insanity. “all they need to do is ensure that debt grows more slowly than their tax base.” We’re spending 2 Billion more a day than we take in. And this guy wants to spend more! More! Um…that’s the opposite of making sure your debt grows more slowly than their tax base. But don’t worry we can always raise taxes. After all the budget is about 3.5 Trillion a year and currently only taking in about $1.4 Trillion a year…so if we raise taxes on the Top 20% of wage earners (because really it’s the whole Top 20% that are evil not just the Top 1%, ask any Democrat) and raise their tax rates by a meager 35% (without any loopholes involved) that will raise an extra $1.4 Trillion…which means we would now be taking in $2.8 Trillion (and I’m sure that 35% increase isn’t going to have any negative effects on the economy as a whole, no, none whatsoever) so now we’re taking in $2.8 Trillion a year (assuming the economy doesn’t drop) to pay off a $3.5 Trillion budget every year. Somehow, I don’t think we’re exactly ensuring “that debt grows more slowly than their tax base.” But don’t worry Krugman wants us to spend MORE, I’m sure that will solve everything.
And then there is his other point:
“Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.”
This isn’t like money we’ve taken from the saving account and put in the checking account as he seems to suggest. The money we owe to ourselves (at least I assume this is what he is referring to, his lack of specifics makes it very hard to nail him down on anything as he can always say “oh, no I meant something else,” it’s an age old trick used by people without an actual case) is to programs we have borrowed from (like Social Security or various other payments we will have to make in the future…it’s like raiding a pension fund to keep the company afloat, and that always works doesn’t it?) and money owed to U.S. bond holders (and it’s not like they ever need to be paid back…I’m sure they bought those bond hoping to take a huge economic loss).
As I said this is the guy whom Democrats look to for economic theory. And you wonder why we have unemployment problems.