ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Thursday, January 04, 2007

Paul Krugman is an Idiotic Hack for the Dems

That this idiot is still sought out by those in the MSM bubble for thoughts on economic issues is amazing - because he is clearly just a Hack for the Dems. This post by Don Luskin has the goods on Krugman:

KRUGMAN'S DEFICIT FLIP-FLOP For years I've called Paul Krugman "America's most dangerous liberal pundit" because of the bald-faced lies about the economy and politics that spewed twice a week from his New York Times column. Now, for a change, he's telling the truth. And that makes him more dangerous than ever, because as always Krugman represents the vanguard of elite liberal opinion.

Krugman revealed the truth in a Times column just before Christmas, when he created a rationale for why Democrats now in control of congress should abandon any concerns about the federal budget deficit, and instead go on a spending spree. How things have changed! While the GOP controlled congress, Krugman devoted column after column to what he called America's "fiscal train wreck," President Bush's "sheer banana-republic irresponsibility," a "fiscal catastrophe" and a "fiscal quagmire."

When Democrats were out of power, they all followed Krugman's deficit-hawk lead. Hillary Clinton worried about the "staggering federal deficit," Nancy Pelosi warned about "mountains of debt," Barack Obama fretted about "our structural deficit problem" and John Kerry raved about "fiscal cancer."

But now that they're in power, get ready for deafening deficit silence from the Dems. Krugman has their new deficit-embracing talking points all figured out. Surpluses are bad, deficits are good. According to Krugman now, the budget surplus of 1998 to 2001 was "a bad thing, because it greased the rails for Mr. Bush’s irresponsibility." Now, Krugman says, "let the deficit be."
"By spending money well, Democrats can both improve Americans’ lives and, more broadly, offer a demonstration of the benefits of good government. Deficit reduction, on the other hand, might just end up playing into the hands of the next irresponsible president."
It's not only Krugman. He's just channeling the spirit of the whole Angry Left blogosphere, from which Democratic leadership now takes all its cues. For example blogger Matthew Yglesias writes,
"If Democrats take the view that first we must balance the budget, then we must bring the budget into surplus, and then we can institute new programs, the country is going to be stuck forever in the Reagan-Clinton-Bush loop where the time for new programs never comes."
Just because these thought leaders on the Left are signaling that Democrats won't care much about deficit reduction anymore, don't think that means they won't want to see higher taxes. They will. Their mechanism for getting them is "pay-as-you-go" budgeting, which Krugman explains "would basically prevent Congress from passing budgets that increase the deficit." He says, "I’m for pay-as-you-go," and Angry Leftist blogger and UC Berkeley economist Brad DeLong explains why:
Restoring pay-as-you-go means that the Bush tax cuts expire at the end of this decade--unless, that is, som [sic] coalition finds sufficient spending reductions relative to the current baseline spending path to pay for an extension of the tax cuts. The embrace of pay-as-you-go orders up a $300 billion rise in taxes at the end of this decade.
Put it all together and rephrase: raise taxes and spend the money on programs favored by Democrats -- and spend it quick before the GOP gets back into power!

[... Click Here to read the rest...]

Krugman writes now that "Rubinomics made sense in terms of pure economics." Yet today, despite the Bush administration's deficits, the yield of 30-year Treasury bonds is only 4.81%, lower than at any point during Rubin's tenure as Treasury Secretary with the exception of just two single days in 1998. Low interest rates may indeed be good for growth, but evidently Rubin's deficit policies were less effective in achieving them than those of the Bush administration and the Republican congress. Don't expect the Democrats to give the GOP any credit, though -- just expect them to spend money, now that they don't have to worry about rates.

It's not just the Democrats who won't give the GOP any credit. Many conservatives are convinced that the GOP lost control of congress last November because of excessive spending. But the reality is that the GOP has bequeathed to the Democrats budget deficits that are trivial, both by historical standards and by the evidence of interest rates. So the Right and the Left have something in common now -- they can both beat up the GOP for a profligacy that doesn't actually show up in the numbers anymore . The difference is that now the Democrats get to open up the spending spigot even wider, and raise taxes to boot.

If you stayed at home on November 2nd, thanks a lot...


Your Co-Conspirator,
ARC: St Wendeler