While President Obama continues his prolific efforts at spending America into third-world oblivion, and the Republicans appear almost ready to throw in the proverbial hat, there is one prominent individual, in particular, who can be depended upon to confidently recast the deficit argument into the fairy-light of radical ridiculosity.
That individual is none other than Left-Wing Economist Paul Krugman, a man who has never seen a government dollar go to waste, and who insistently wishes for an impending extra-terrestrial attack on earth, so that Obama can spend America into extra-galactic oblivion.
In his latest article, Krugman can be heard to be insistent on kicking the debt-can down the road, over the cliff, and into the dark abyss of shredded-up currencies, and perhaps even well beyond the boundaries of the galaxy, since the stupendous amount of $ 17 trillion just hasn't quite done the trick for the US economy as of yet.
The illustrious Krugman begins by citing Speaker of the House John Boehner:
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, (Early 1990's) the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
Now here is where the fallacies begin in earnest, for Krugman, and from there they never seem to stop, especially for a Nobel Prize winning Left-Wing anti-capitalist. Krugman begins by hearkening all the way back to Boehner's career while Clinton was in office in the early nineties and onward. However, what Krugman leaves out is the history of this period in the US. You see, the reason for that decade of fiscal balance was due to the Republican's "Contract with America," where the US government was shrunk down to size, the welfare state was largely done away with, and individual responsibility became the hallmark of governance brought under control.
The important thing to remember? Congress holds the purse strings, referring to the bicameral chambers of the Senate and the House, which have remained split, since the 2010 election. In essence, in the decade of the nineties, Clinton's comparably moderate hands were essentially tied in what he could spend, by Congress, hence Krugman's delight at naming Clinton as the budgetary savior, while forgetting the essential truths at play.
A Bit of History
At the time, it was 1994 when a debt-concerned America moved control of both the House and the Senate over to the Republican Party, and it was here that fiscal sanity was returned to America, at least for a time. The budget balancing under the Republican controlled chambers would continue for a decade, as the party of limited government would remain in control. It wasn't until 2001 when a Senate Republican would flee to the Democrat party that the Senate would come back under Democrat control, but only for a short time.
On September 11, 2001, America's walls would be breached for the first time in the modern era by a group of religious radicals dedicated to the destruction of western civilization and its leader, the US. It was also here that America would first come head-to-head with the anti-Christ forces of fundamentalist Islam, conflict in which Krugman only seems to find contemptuousness towards the US, and for reasons already enumerated.
In 2004, control would revert back over to the Republicans. In fact, not until January 2007 would control go fully over to the Left-Wing of American politics, and this is where America's budgetary nightmare would begin, and in spades.
However, what's truly interesting is Krugman's earlier allusion to the term "unfunded wars," as if anything that Obama and the Democrats have been doing "is actually funded?"
In fact, the problem is the annually accruing total of all of these deficits, not one yearly deficit itself. Indeed, at a certain point of running these annual deficits, as they continue to stack up year after year, the total build-up becomes completely untenable, which is the essential problem, and which is also where we find ourselves in the America of today--a problem which Obama and Leftist "experts" like Krugman never seem to take into account.
Krugman haughtily continues:
But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.
But, wait, Mr. Krugman. We have all been told by the mainstream media, and yourself, over the past 4 years that things are looking up, that the economy is improving and things will be right again very soon. Now, after the presidential election, the tune has seemingly become just a shade more realistic or should that be fatalistic?
Now you're telling us that things haven't really gotten better, despite all of the economic crowing in 2011 by the media, and we need to keep spending ourselves into just a little bit more of oblivion so things will then turn out, magically, just right?
So, because these policies that Krugman has been espousing for the last four years have been working so infamously, we need to now hurry up and wait just a few years more to fix the problem. But, Krugman, dear man, what if the real problem is actually the fact that we're not doing anything to balance this outrageous debt in the first place, hmm?
Krugman haltingly continues:
Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.
This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
Indeed, that's not a basic point, but rather it's a fatally flawed point and is easily debatable. Government spending has to be taken from someone or something, Krugman, and if it's taken from someone, then that someone can no longer spend it. It it's taken from something, that being an bond invested in the government, then over 40% of the money taken now has to be repaid to the something or someone in the future, in the form of interest. With America's current load of debt, it becomes money that cannot be used by the very people who actually make the economy go forward.
In truth, if government spending is so absolutely fantastic, Krugman, then why don't we put everyone on unemployment and enjoy the crest of unbounded economic activity, that's sure to follow? Well, that's ridiculous, Krugman might say, and indeed, Krugman would be correct, which reflects the glaring flaw in his imperfect arguments.
Then Krugman trots out two Socialist forms of governments , Ireland and Great Britain, which have been overspending themselves to the same tune as Greece, and tells us that there spend-slashing is what has made their economies sink. However, how can one reach that particularly facile conclusion without referencing the historical facts?
Krugman's reference to the UK and its latest round of difficulties, from 2002 onward, represents a Left-Wing, Obama-style, aggregate of deficit spending, by a Leftist controlled government that finally took its toll in 2009, when the annual spending deficit soared to over $160 Billion Pounds, even after 8 years of $30 billion dollar + deficits. While Krugman blames Cameron's recent reductions in deficit spending for the last several years, Krugman completely ignores the build-up of economic detritus that has been aggregated a a staggering pace for the entire decade prior.
But what about Ireland, which is the other country that Krugman trots out? Oh, snap! Here, yet again, an aggregate of massive deficit spending that the tiny little island nation's economy could in no way overcome in just a few scant years.
Krugman, dejectedly, continues:
Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs.
John McCain, Krugman? Seriously? The diminutive Ogre of the Tea Party's Hobbit-Land, as he calls it? Is he the absolute best that you can come up with on the Republican side, for God's sake? He can't even win a Presidential election against a radical Marxist in the Heart of world capitalism. The scrapings must be getting thin, indeed.
Krugman hesitantly continues:
It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.
Weaponized Keynesianism? That would have to presuppose that the military makes money, somewhere along the way and it simply doesn't. Krugman is taking a government economic spending model called Keynesianism and slathering onto an entity that simply has no tangible way to produce an income, thus encompassing a sort of one-way military economy. Instead of "weaponized Keynesianism," lets try "weaponized imbecilism" which is apparently at the heart of Ole' Krugman's US economy-shattering attitude.
That dog simply won't hunt, Krugman. The military is not a micro-economy, although, that academian-acid you're hitting must be some pretty good stuff, I must point out.
Krugman woozily, continues:
Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.
As if there is a good time to throw-up, Krugman? In fact, austerity measures are undertaken by a State to avert an economic disaster, slated to happen somewhere down the road, you know, the road we're kicking the can down. If the economy has a stomach ache because of something that it has consumed which is causing extreme discomfort to that particular economy, then the economy needs to in essense, throw-up, and get whatever's causing the economic bellyache to go away.
Now, while throwing up isn't a pleasant thing, it's much better to take that little bit of discomfort now, rather than to allow whatever is hurting the economic body, to run its course and make the economy septic after being allowed to be absorbed throughout the entire body economic. Never mind what eventually comes out the other end of that same economy, which just so happens to be what we are only mildy beginning to see right now in comparison to what may come.
Krugman grimaces onward:
One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.
But wait, Krugman, didn't you, just a bit earlier, crow about how the decade of nineties was the greatest thing since Jiffy peanut butter? You know, while your greatest American hero, Bill Clinton, had his hand firmly on the tiller, and not a few other things , I might add? Wait, I shall go and fetch it for you...and voila' from just a few paragraphs up:
During the first decade of his time in Congress,(beginning in 1991) the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in.
Okay, so now we all are confused Mr. Krugman.
In the first part you painted the decade of the nineties as the most wonderful time of the years. Now you're telling us it wasn't, except for an increase in private spending? That's not Keynesianism, that's Reaganism, and we all know how you feel about Reagan! Government spending is the thing you've been keying on throughout this entire article, especially when you continually bring up Keynesianism, so what gives, exactly?
Maybe it's actually you, Sir, who are confused.
Krugman warily continues:
Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
Ah, but here, you see, the Fed has a bit of a problem. If interest rates naturally rise, ahead of the US Treasury's short-term treasury bonds, and eventually long-term bonds, then bond interest yields will be forced to rise also, over time. What if the markets dictate an interest rate rise ahead of the treasury's artificially set levels? Then, we could have what is referred to as a 'treasury bond bubble.'
In order to set treasuries at a level competitive with the markets, in this case, the interest rates that the US pays in debt could quadruple over time, essentially forcing the US into paying all of it tax revenue in bond debt, at some point.
Now, we all know what that means, right? The longer we wait to fix the problem, the worse these eventualities can and will become.
Krugman plows forward:
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.
Indeed, America's financial security ratings have already dropped to an AA level for the first time in the nation's history. Is not that, alone, enough to say that America is in the midst of a financial crisis? But then, Krugman goes on to state that there is a problem, but it's not one that needs to be corrected anytime soon. In essence, if you're walking along on set of railroad tracks and a train rounds the corner, when should you step off? Should you immediately exit the tracks upon seeing the danger? Or, should you wait until the train is about to completely obliterate you, efforting a daring escape at the last possible moment?
Maybe Krugman just likes living dangerously....but what if the train speeds up? What if your foot becomes caught in the track? What if you pass-out in the ensuing excitement and unexpectedly collapse on the tracks? Why wait for a better time when we may, in fact, be within that better time before everything begins collapsing all around us?
Who, in fact, could actually know the answer to this question?
Krugman stays on-track:
Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?
But...even Krugman himself earlier writes that now would be a bad time to correct our government spending due to the bad economy. Hasn't every economist in the land, including the President, told us that raising taxes in a bad economy is a horribly bad thing to do? My, we seem to have a bit of quandary embedding itself throughout Mr. Krugman's assertively confused opinion.
But Krugman intrepidly circles back around:
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
So, in essence, stay on the tracks, ignore the train hurtling towards us, FORWARD...to the culmination of Obama's transformation of Amerika, got it!
Next stop? Procrasti-Nation Station...where living dangerously and spending other people's money, namely our children and grand-children's, becomes the national pastime.
Move over football, there's an even more dangerous game in America these days.
And this one's for keeps....