Krugman On Morning Joe: "How Many Times Do I Have To Be Right?"

[soulflower]

I hope Obama and the Dems read Krugman's book:

I really enjoyed watching Paul Krugman on Morning Joe today, responding to the paid deficit hawkery of Very Serious People Ed Rendell and Richard Haas. (Watch for the return of the invisible bond market vigilantes!) He talked about why there's no good reason to cut spending during a depression, and explained in detail why the deficit isn't an urgent problem.

Ed "Fix The Debt" Rendell said the best way to stimulate the economy was to get the debt under control.

"Have you been living in the same country I'm in these past five years?" Krugman retorted, saying the deficit is far down on his list of things to worry about.

Video - http://crooksandliars.com/susie-madr...-many-times-do

[gonzoliberal]

In National Economics, it's reality vs. betaverse.

May the best paid media win.

[flyboy56]

They haven't had a plan to pay down the debt in the past and they don't intend to pay it down in the future. The day we have to worry about the $1.2T+ deficit annually is when we lose our credit rating and can no longer continue to borrow money to pay our bills. Someone always has to die before change is made.

[soulflower]

In National Economics, it's reality vs. betaverse.

May the best paid media win.

Krugman brings data to his arguments. The media personalities bring group-think

[cprenegade]

Yeah because Paul Krugmen has never been wrong before. He is like every other prognosticator, you hear a lot from them when they get one right and they disappear when the get it wrong.

Krugman could not have been more wrong in his assertions. Somehow he missed Fannie and Freddie's acquisition of $4.3 trillion in subprime, low down payment (5% or less) and Alt-A loans. How about the $2.7 trillion of CRA loans? After accounting for overlap among these groupings, he somehow missed some $5 trillion in such loans, trillions of which remain to plague the nation's economy.

http://www.realclearmarkets.com/arti...ong_97499.html

[soulflower]

Yeah because Paul Krugmen has never been wrong before. He is like every other prognosticator, you hear a lot from them when they get one right and they disappear when the get it wrong.

Krugman is right. The author of your link is wrong.

Fannie didn't underwrite Subprime or Alt-A loans.

There's a difference between lending versus buying debt from other banks.

Trust me. I worked for a Subprime/Alt-A lender during the Refi-Boom

[SemiAuto]

In National Economics, it's reality vs. betaverse.

May the best paid media win.

Paul Krugman in the betaverse.

The best paid media got you Obama.

[soulflower]

Paul Krugman in the betaverse.

The best paid media got you Obama.

England cut spending to the bone. So did Ireland.

If my memory serves me correctly, Cato was praising Ireland for their austerity measures a few years ago.

[SemiAuto]

England cut spending to the bone. So did Ireland.

If my memory serves me correctly, Cato was praising Ireland for their austerity measures a few years ago.

False. England cut the rate of increases in spending.

Now, let’s remember that the Conservative-Liberal Democrat coalition government that came to power in May 2010 adopted what The Economist hailed as a balanced approach of fiscal consolidation based on £1 of tax increases for £3 of spending cuts. To be fair, the British magazine also said that if economic recovery proved hard to achieve, the government should consider a reprieve in tax increases, but not on spending cuts. We all know that the tax increases already took place (the VAT rate went up from 17.5% to 20%, for example). But as we can see, spending cuts haven’t taken place at all. Thus, austerity in Britain consists only of tax increases.

It’s hard to estimate the impact of tax increases on the British economy. Certainly the economic turmoil in Continental Europe has played a role in taking the U.K. into a second recession. But those who claim that “austerity” is responsible for Britain’s economic malaise should be honest and acknowledge that by austerity they mean only tax increases, not spending cuts.

Yet another example of Krugman not dealing with facts.

[SemiAuto]

Once again, it’s pretty evident that there hasn’t been any cut in spending in recent years, neither in nominal or real terms. If we look at total government spending as a share of the economy, it went up from 51.6% in 2000 to 56.8% in 2009, and then it came down a bit to 55.9% in 2011—still the highest in the European Union. I doubt that anyone, other than perhaps Paul Krugman, can seriously claim that a decline of 0.9 percentage points in government spending as a share of GDP represents savage austerity.

How many times does Krugman have to be wrong?

[Phineas Finn]

Why does the right continue to claim that cutting previously authorized spending is not a spending cut? Government agencies don't sit and wait for the check to clear before they begin planning for the future. If a British government agency received a budget increase of 5 percent, plans would have been made based on that budget. The ripple effects would have spread out to the various service providers (most often private sector) that make the agency's programs happen. Production would have been put on-line, personnel decisions made, etc. But if that budget was later cut to a 2 percent increase, real cuts in agency budgets would have been necessary. Money that had been put into the pipeline had been taken out: Contracts would need to be modified downward, hiring delayed or eliminated, etc.

It makes a good sound-byte to say that there were no actual cuts, but that statement does not give an accurate picture of what happens at the agency level and on the street.

Cutting previously budgeted funds does have a negative effect on the economy -- particulary during a recession and especially when those cuts are to programs that were previously underfunded relative to their needs.

[SemiAuto]

In short, austerity in Spain, described by Paul Krugman as “insane,” consists mostly of significant tax increases and timid spending cuts.

Krugman wrong on Spain.

[soulflower]

Krugman wrong on Spain.

So your point is that the problem is that these economies haven't cut spending enough?

On what planet has austerity lead to economic growth?

[Phineas Finn]

How many times does Krugman have to be wrong?

Total spending as a share of GDP is more than just the amount of money budgeted. If an economy is shrinking, spending as a percentage of GDP can increase even if spending is cut.

While no one can deny that Krugman has a leftist perspective, I don't think he shares the level of dedicated devotional faith displayed in some of your links.

[SemiAuto]

However, as is the case for Britain, France and Greece, commentators are unclear about what austerity means for Italy, although many seem to imply spending cuts. For example, if Krugman’s criticism about Italian austerity is consistent with his critiques about austerity elsewhere in Europe, we know he means spending cuts. So let’s take a look and see if there has been any:

...

If austerity is to blame for Italy’s recession, we need to be clear that by austerity we mean mostly tax increases with almost no reduction in government spending.

Krugman is not dealing with the facts on Italy.

Of course, the US is raising taxes and spending the revenue. Austerity, Krugman style, is bad policy in Europe. How many times does he have to be wrong?

[Phineas Finn]

Krugman wrong on Spain.

Forgive me if I look skeptically at Cato's description of a "timid" spending cut.

[Calamari]

How many times does Cato have to be wrong?

[SemiAuto]

So your point is that the problem is that these economies haven't cut spending enough?

On what planet has austerity lead to economic growth?

If you define austerity as fiscal restraint then Canada is your answer.

Krugman is only partially wrong here.

[SemiAuto]

Forgive me if I look skeptically at Cato's description of a "timid" spending cut.

Government spending in nominal terms increased at an annual rate of 7.6% from 2000 to 2009. Ryan Avent at The Economist says that “the push for austerity began in 2010,” and thus we have to look at nominal spending after that year, when according to Avent, it fell “substantially” due to austerity measures. In reality, it went down by just 1% in 2010 and a further 3.6% in 2011. If these cuts seem “substantial” to Avent, then a yearly average increase of 7.6% for almost a decade must be staggering.

What would you call it if not 'timid'?

[soulflower]

If you define austerity as fiscal restraint then Canada is your answer.

Krugman is only partially wrong here.

1- Canada didn't get kneedeep in the Banking/investment bubble. Their banks have been more stable over the past decade or so.

2- Doesn't Canada have Single Payer healthcare? And hasn't Krugman advocated controlling healthcare costs as the key to dealing with spending?