Krugman Calls for More Stimulus. What Else is New?? More Debt and Bigger Government and a Bigger Depression!

Abstract: Paul Krugman gives new meaning and depth to the word tautological as he calls on our inept government to spend more money while ignoring the consequences of inflation and currency debasement. Our currency may collapse as did Iceland. The Fed is about to attempt to claw back some of the stimulus money as our debt dangerously approaches 100% of our G.D.P. and Krugman moans.  As usual, spending is the only known way to restore the economy according to the left and Krugman grinds on this policy over and over and over.

The word tautological[1] would be quite obscure if not for political propaganda machines like the New York Times and some of their sorrier sisters. Their writers[2][3][4][5][6][7][8][9] and staff[10] thrash about in an ideological competition to see if any are noble enough to match the elegant essays of their honored Pulitzer Prize winner Walter Duranty.[11]He bequeathed to them a certain literary mantle of invincibility and indelible fame when the Times published his leftist-authorized political lies and received uncultivated acclaim from the depression-era masses who could now openly celebrate the leadership of Josef Stalin while he happily murdered millions. Duranty taught the NYT how to be pure propagandists rising well above the stature of Eugene Debs as busy workers who must pound upon their rusty anvils and hammer out narrow ideological snippets of propaganda from a narrow agenda and thus turn or twist any news event into some new and pressing validation for bugger government, retreat from wars against Marxist monsters or Islamo-Fascists[12] and prattle on endlessly about the undying splendor of higher taxes. Most pedestrian keyboard plunkers on the Times’ staff cannot give us the inkling they can synthesize even a modicum of the political magic of the Duranty essence because of their manifold ineptitudes and transparent sophistry of their contributions, but they try.  Paul Krugman may be an exception as he has been given a special warrant from the Peace Loving Swedes [dirty gun peddlers and mass murderers in cahoots with their inbred lackeys the Norwegians--now EcoQuislings.] in the form of the phony Nobel Prize[13] to continue to turn the old Marxist crank.

As an exercise, a search upon the op-ed piece today produces a telling set of words that appear and another set that do not appear although they should to address the consequences of some governmental act:

Words and phrases missing from this opinion: tax, responsibility, excessive taxation, inflation, debasement, tax cuts, government blunders, mistakes, corporate hiring, etc.

Words and phrases found in this piece: stimulus, G.D.P., growth, spending, monetary tightening.

We can see from the lists that the point of the current tome is to avoid objectivity or even the appearance of a comprehensive or responsible analysis of the economic picture and to push spending. This piece is stogy advocacy and not related to economics as we might presume.  We find, as always, that the only important factors to be discussed by this near-bankrupt paper are: enlarging government by spending and taxation or by taxation and spending whichever case is the most feasible at the moment.

Some examples of the current truncated logic:

“Here’s what’s coming in economic news: The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.”[14]--That 1937 Feeling By Paul Krugman Op-Ed Columnist Published: January 3, 2010  [Emphasis is mine in all quotes.]

There is no useful information offered here—only the setup for the warning that the stimulus will be retracted and that the Fed will be contracting the money supply probably with higher interest rates. This is a serious threat to the growth of big government and as such is the basis of this article.

“But if those calls are heeded, we’ll be repeating the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over, that it was time for the economy to throw away its crutches. Spending was cut back, monetary policy was tightened — and the economy promptly plunged back into the depths.” --That 1937 Feeling By Paul Krugman

I haven’t taken the time to research all the krugmanical whines and blather about other administrations making errors, or the same errors that Krugman is advising [FDR, LBJ, Jimmy Carter, Clintons before Newt Gingrich cut off their money] but one thing is clear: when nations take on massive debt that approaches 100% of our G.D.P. as the Obama admin and Congress are doing then this is apparently not a mistake.  The world historical facts about sovereign defaults and financial crises dating back 800 years show otherwise.[15]We are forced to think in 1937 terms where debt crushed several economies, but in this instance, with the threat of not bloating government at hand, we can selectively pluck out reasons to spend and spend and ignore the increase in the money supply M2 that will surely lead to massive inflation.  Ignoring the fundamentals of economics, as is the Krugman custom, we can just spend and spend and spend our way to prosperity as California[16][17][18] has shown us the way. They are headed for default, period. So are we if we continue to spend like this and even Bernanke, a fellow Neo-Keynesian must think about this.

Continuing right on with the fairy tales:

“Which brings us to the still grim fundamentals of the economic situation.

During the good years of the last decade, such as they were, growth was driven by a housing boom and a consumer spending surge. Neither is coming back. There can’t be a new housing boom while the nation is still strewn with vacant houses and apartments left behind by the previous boom, and consumers — who are $11 trillion poorer than they were before the housing bust — are in no position to return to the buy-now-save-never habits of yore.” --That 1937 Feeling By Paul Krugman

Krugman deftly slides past the very fact that this depression was caused by debt[19] and we are in a debt-driven deflationary spiral[20] that might be ending and also might have been temporarily postponed a depression by doubling our money supply by the Fed. We might just be rewarded with the second half of this depression this year or next that was due to the abuse of credit and a mere 3-5 trillion dollars lost from ‘affordable housing.”[21] We have two more bubbles to get around: commercial credit and consumer credit cards. [22]

The point here must be that a recovery must depend solely upon the consumer, which is true in a full employment sense [95% employed], and also upon a restoration of the housing prices to 2007 levels  where, we must presume, the equity credit was generated for such consumer spending. Credit = money. The comment that we are “are $11 trillion poorer” is only partially true because the Fed may well have spent this much already in their rescue attempts. That more than doubles the money supply and has done nothing for the housing market or the jobs market as we are still at 10% official and 17% actual unemployment. Obama’s stooges promised a turnaround and unemployment below 8% if we used their plan:

The Christine Romer Prophecy:

“…, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”[23][24]--CNSNews.com Monday, July 06, 2009

Only 7 months ago?? The several Obama stimuli have failed to do much and are jokes in the international economic community and include cash for clunkers[25], shovel-ready bridge projects with no shovels and other follies such as green jobs. The obvious and historical solution here is tax cuts for small businesses but that is an obscene topic for the left and way beyond the boundaries of discussions with leftist advocates who pretend at economics theory.

The tautological pitch:

“The Obama fiscal stimulus plan is expected to have its peak effect on G.D.P. and jobs around the middle of this year, then start fading out. That’s far too early: why withdraw support in the face of continuing mass unemployment? Congress should have enacted a second round of stimulus months ago, when it became clear that the slump was going to be deeper and longer than originally expected. But nothing was done — and the illusory good numbers we’re about to see will probably head off any further possibility of action.” --That 1937 Feeling By Paul Krugman

“Will the Fed realize, before it’s too late, that the job of fighting the slump isn’t finished? Will Congress do the same? If they don’t, 2010 will be a year that began in false economic hope and ended in grief.” --That 1937 Feeling By Paul Krugman

Isn’t this clever! Krugman ignores the Romer Promises and fails to even mention tax relief for small business and fails to advise us on the massive costs of the cancerous health care monster that Congress is working on.

With Krugman it is always tax and spend or, to be novel, spend and then tax.

rycK

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