dxing
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Paul Krugman, Having It Both Ways.

Mon Aug 31, 2009 4:41 am

I had wondered how long it would be before someone in the major media started whispering about how these large deficits that the Obama administration is running up really aren't all that bad for the country. Which would be OK if they hadn't spent the last 8 years bemoaning deficits, that look trivial in comparision, by the Bush administration. Looks like Paul Krugman of the NYT is the winner.

Back in 2002 deficts were bad.

http://www.nytimes.com/2002/01/22/opinion/a-fiscal-fantasy.html

Finally, the administration will try to convince you that the return of deficits won't hurt you personally. But for millions of Americans deficits will soon began to pinch, hard.


Fridays column? Go figure, deficits good!

http://www.nytimes.com/2009/08/28/opinion/28krugman.html

What this tells us is that right now it’s good to run a deficit

So I guess it all depends on exactly who is in office as to whether deficts are good or not. Excuse me while I go chuckle.

Can't garauntee that you won't go to a register screen since this is the NYT but the columns are real.
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Flighty
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RE: Paul Krugman, Having It Both Ways.

Mon Aug 31, 2009 5:35 am

Krugman was a huge fan of the economic stimulus way back when. He argued it should be much bigger than it was.

Of course, the debt is also a problem. Maybe the problem with Krugman's view is that it is OK to run a deficit in times like this, if you are otherwise very well behaved. But we aren't -- we always run deficits rain or shine. The notion that we are just good ol' rainy-day deficit spenders, but otherwise things are squared away, has no credibility. Our political system can't handle cutting spending when times are good. This is why Krugman is realizing that his ideas were right theoretically, but totally wrong in this case in practice. The stimulus was dumb because it is not part of a logical regime spanning the decades that people trust. In fact it's endangering the public trust in our government's sustainability. This goes way beyond good faith deficit spending and becomes something much more sinister.
 
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RE: Paul Krugman, Having It Both Ways.

Mon Aug 31, 2009 6:22 am



Quoting DXing (Thread starter):
So I guess it all depends on exactly who is in office as to whether deficts are good or not. Excuse me while I go chuckle.

I'd rather puke but to each their own. Krugman is a fine writer in many cases but he's clearly a hypocrite now. Back to James Howard Kunstler's rantings on clusterf*ck nation...
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avent
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 8:46 pm

I'd guess Krugmann would argue that there are two very different modes of running deficits here:

1. running deficits in order to break the back of a government you see as being too welfare oriented - all the while giving tax breaks to the wealthy - and waging wars deemed so important there is no need to raise taxes to pay for them

2. using deficits to try and prevent an inherited mess turning into a catastrophic meltdown.
 
NIKV69
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 10:52 pm

I think you are going to see a lot of this. The left is scared now and they will do anything to get this guy another 4 years. I mean if the 2010' mid term election goes like it looks now forget it. The left won't know what to do if Obama loses in 2012'
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
texan
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:03 pm

Deficit spending is good in down times if it is done responsibly in a way to create jobs, something Bush's policies did not do and something I have doubts about whether Obama's policies will do. The U.S. government should do the opposite of the consumer in order to preserve financial integrity: save in the good times and spend in the bad times. But again, the spending only works if it is well directed and benefits the system by creating jobs and actually stimulating economic growth. That is one reason why you have a difference of opinion on deficit spending.

Texan
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avent
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:12 pm



Quoting NIKV69 (Reply 4):
I think you are going to see a lot of this. The left is scared now and they will do anything to get this guy another 4 years. I mean if the 2010' mid term election goes like it looks now forget it. The left won't know what to do if Obama loses in 2012'

Scared the mess left by GWB is more than a rational moderate can handle?

You Betcha!
 
PPVRA
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:13 pm

Another one of Krugman's advice from 2002:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

I mean, really, people still listen to this guy?
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avent
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:36 pm



Quoting PPVRA (Reply 7):
I mean, really, people still listen to this guy?

I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering.
 
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Dreadnought
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:41 pm



Quoting Avent (Reply 6):
Scared the mess left by GWB is more than a rational moderate can handle?

Keep thinking that way. The last time the Dems ran amok led to 12 years of Reagan and Bush.
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seb146
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:42 pm



Quoting DXing (Thread starter):
So I guess it all depends on exactly who is in office as to whether deficts are good or not.

Same with partotism, my friend. It was patriotic to support the president before. Dissenters were terrorists. Now, dissenters are patriotic and supporters of the president are Nazis. Two sides of the same coin.
Patriotic and Proud Liberal
 
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Dreadnought
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:47 pm



Quoting Seb146 (Reply 10):
Dissenters were terrorists.

Who said that?
You have enemies? Good. That means you've stood up for something, sometime in your life. - W. Churchill
 
avent
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:48 pm



Quoting Dreadnought (Reply 9):
Keep thinking that way. The last time the Dems ran amok led to 12 years of Reagan and Bush.

I agree, and I have concerns about the stimulus spending, but for now I'm assuming the Obama administration is taking a position that it's the lesser of two evils and that if a resurgent economy produces the revenues to offset the stimulus, it might work out ok.

Still, I view with great suspicion, the notion that spending in order to do damage control on excess spending is appropriate.
 
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Dreadnought
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RE: Paul Krugman, Having It Both Ways.

Wed Sep 02, 2009 11:54 pm



Quoting Avent (Reply 12):
Still, I view with great suspicion, the notion that spending in order to do damage control on excess spending is appropriate.

The problem with stimulus spending is timing. Delay in starting it, and you don't stop the recession. Stop it too late, and you create inflation and "overheat" the economy. The signs that you have to start stimulating or stop are all trailing indicators - i.e. things that have already happened and you have compiled and quantified. It's like driving a car, and deciding when to hit the gas or the brakes according to what you see in the rear-view mirror.

My suggestion is that the government shouldn't even try to do it. I think it just makes it worse, deepening the troughs and accelerating the highs.
You have enemies? Good. That means you've stood up for something, sometime in your life. - W. Churchill
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 12:00 am



Quoting Dreadnought (Reply 13):
My suggestion is that the government shouldn't even try to do it. I think it just makes it worse, deepening the troughs and accelerating the highs.

I'd say you have legitimate concerns, but we do elect leaders and they and their advisors have their turn at bat. It's really hard to envision reasonable leaders just sitting by and letting things meltdown; having them try and soften crashes is not a bad thing, but, as you say, whether they catch it at the right time is something else.
 
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 12:26 am



Quoting DXing (Thread starter):
So I guess it all depends on exactly who is in office as to whether deficts are good or not. Excuse me while I go chuckle.

Unfortunately we are bound to find hypocrisy on both sides of the coin, makes it that much harder to trust anyone anymore.  banghead 

Quoting Flighty (Reply 1):
But we aren't -- we always run deficits rain or shine.

And no matter where you sit in the political spectrum you should expect proper accounting methods from your leaders. Deficits are deficits, no matter when they are run or by whom. And you hit it straight on in that, as a nation, we just don't know how to spend responsibly. I understand that there are many areas (like infrastructure) which require urgent attention but I'm sure there are ways to accomplish things without running that much further into debt...I mean, that's why we vote for them, to figure this kind of sh*t out!
 
baroque
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:11 am



Quoting DXing (Thread starter):

Fridays column? Go figure, deficits good!

http://www.nytimes.com/2009/08/28/opinion/28krugman.html

What this tells us is that right now it’s good to run a deficit

So I guess it all depends on exactly who is in office as to whether deficts are good or not. Excuse me while I go chuckle.

Dearie dear oh me. So just as well someone understands.

Quoting Avent (Reply 3):
I'd guess Krugmann would argue that there are two very different modes of running deficits here:

1. running deficits in order to break the back of a government you see as being too welfare oriented - all the while giving tax breaks to the wealthy - and waging wars deemed so important there is no need to raise taxes to pay for them

2. using deficits to try and prevent an inherited mess turning into a catastrophic meltdown.

Nice posts Avent.  checkmark   checkmark 
 
dxing
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:46 am



Quoting Avent (Reply 3):
I'd guess Krugmann would argue that there are two very different modes of running deficits here:

There is no good way to run a deficit, period. It was wrong in the Johnson, Nixon, Ford, Carter, Reagan, Bush 41, Clinton, and Bush 43 administrations and it is just as wrong in the Obama administration.

I still think it is rather sad that politicians campaign on how much the other guy spent and how wrong that was, and then spend just as much or more when elected.

Quoting Avent (Reply 3):
all the while giving tax breaks to the wealthy

I assume you are talking about the wealthy that still pay more than 50% of all income taxes in this country? BTW, I'm not wealthy and I got a tax break. The idea that the top 5 or 10% will continue to carry the other 90-95% on their backs forever, or that it is even right that they do so is also fairly humorous if not down right scary. Witness those wealthy individuals that are moving out of NYC due to the rate hikes. There comes a time when it's just better to change locals than to cough up any more.

At some point deficit spending has to end and the longer we delay it the worse of we will all be when it happens.
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Flighty
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:06 am



Quoting DXing (Reply 17):
There is no good way to run a deficit, period

Nah, not really true. Young families take out large loans called "home mortgages" all the time.

Borrowing money is not always a bad thing. Having a line of credit is an extremely positive resource. But it should not be misused. Some people are concerned that lately the government is creating far bigger problems than it is solving by its deficit spending. Obama does not even address what it means to our future viability 10 years down the line.

10 years is a short time in a big country like this!

The best stimulus, at any rate, is a tax cut, preferably a permanent one. That money goes straight to the people, and straight into the economy. Cutting government, and cutting taxes would ironically stimulate the economy.
 
FlyDeltaJets87
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:28 am



Quoting Avent (Reply 3):
1. running deficits in order to break the back of a government you see as being too welfare oriented - all the while giving tax breaks to the wealthy - and waging wars deemed so important there is no need to raise taxes to pay for them

I must have missed the part where I became wealthy overnight, because even I received money back under the Bush tax-cuts. I'm sick of this same, tired line about how only the rich received a break.  sarcastic  (And before you pull up my age and immediately try to discredit, you might want to ask "how" before you attempt to pull any other card, if you do).


Quoting Avent (Reply 3):
2. using deficits to try and prevent an inherited mess turning into a catastrophic meltdown.

Which the rest of us can see is turning into its own catastrophic meltdown.

Quoting Avent (Reply 8):
I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering.

Oh please. Al Gore got a Nobel Peace Prize for Global Warming.

Quoting DXing (Reply 17):
The idea that the top 5 or 10% will continue to carry the other 90-95% on their backs forever, or that it is even right that they do so is also fairly humorous if not down right scary. Witness those wealthy individuals that are moving out of NYC due to the rate hikes. There comes a time when it's just better to change locals than to cough up any more.

I can continue to say, "I've never met a liberal who believes they don't pay enough in taxes".
"Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
 
baroque
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 8:03 am



Quoting FlyDeltaJets87 (Reply 19):
I can continue to say, "I've never met a liberal who believes they don't pay enough in taxes".

Best come to Australia for a shock. In 2007, in polls* IIRC around 60% of voters believed that additional government expenditure on health was preferable to a tax cut. The tax cuts were mostly in the cup of coffee and two biscuits class, but the money saved could have made a difference to our hospitals. And yes the electorate knew that and voted with wider interests in mind.

That 60% included both Labor and Liberal voters.

Of course the then Liberal government tried to buy the electorate with tax cuts, but lost when Labor (to our long term detriment) matched them cut for cut. And where did that get us - why in debt where do you think?

You need to get out more.
 
us330
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 11:15 am



Quoting Avent (Reply 8):
I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering

On international trade and new trade theory, not government deficit spending.
 
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Dreadnought
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 12:32 pm



Quoting Us330 (Reply 21):
I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering

On international trade and new trade theory, not government deficit spending.

It was well discussed at the time how Krugman's Nobel Prize indicated how worthless the Nobel has become - like giving Yasser Arafat the Peace prize.
You have enemies? Good. That means you've stood up for something, sometime in your life. - W. Churchill
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 1:39 pm



Quoting DXing (Reply 17):
There is no good way to run a deficit, period. It was wrong in the Johnson, Nixon, Ford, Carter, Reagan, Bush 41, Clinton, and Bush 43 administrations and it is just as wrong in the Obama administration.

But this was not your original argument. You argued Krugman was contradicting himself by changing his position. I just pointed out that there can be different reasons for deficits that might allow a reasonable person to agree with them in some instances, but not in others.

And as someone else properly pointed out, loans and mortgages are very useful instruments, and a deficit is nothing more than a loan.
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 1:43 pm



Quoting FlyDeltaJets87 (Reply 19):
Quoting Avent (Reply 3):
1. running deficits in order to break the back of a government you see as being too welfare oriented - all the while giving tax breaks to the wealthy - and waging wars deemed so important there is no need to raise taxes to pay for them

I must have missed the part where I became wealthy overnight, because even I received money back under the Bush tax-cuts. I'm sick of this same, tired line about how only the rich received a break. (And before you pull up my age and immediately try to discredit, you might want to ask "how" before you attempt to pull any other card, if you do).

The issue is not whether you are wealthy or not, but whether it was reasonable to run deficits with a notion to underfund non-military agencies AND choose not to raise taxes because of ideology AND to then embark on wars without raising taxes to pay for them. This was reckless in the extreme IMHO.
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 1:53 pm



Quoting Dreadnought (Reply 22):
Quoting Us330 (Reply 21):
I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering

On international trade and new trade theory, not government deficit spending.

It was well discussed at the time how Krugman's Nobel Prize indicated how worthless the Nobel has become - like giving Yasser Arafat the Peace prize.



Quoting Us330 (Reply 21):
On international trade and new trade theory, not government deficit spending.

Oh come now. I seriously doubt any of the readers of these forums have the technical knowledgebase to pass judgement on Nobel prize winners. The Nobel prize is not a perfect system, but if those in the profession endorse a peer, it probably does count for something.

Furthermore, if one is going to make the argument we can dismiss the likes of Krugman simply because the specific work he got the award for is not in deficit spending, it assumes he has no worthwhile perspectives in the area of deficit spending, or that rank amatuers like most of us are qualified to make such determinations.
 
dxing
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 2:16 pm



Quoting Flighty (Reply 18):
Nah, not really true. Young families take out large loans called "home mortgages" all the time.

Not the same. What asset are we aquiring in return for the borrowing we are doing as in the purchase of a home? The deficits government runs up are more akin to credit card spending in which no real assets are aquired, just more and more debt. It could be argued that the GM bailout aquired assets but considering the shape of the auto industry, it might be a long time before a return is realized, if ever. Same with the bad mortgages. Programs are already being set up whereby those debts are sold at fire sale prices. So the kinds of debt you are comparing are different.

Quoting Flighty (Reply 18):
10 years is a short time in a big country like this!

Sure is. We went from theoretically balanced budgets (they really weren't) in the late 90's to the largest deficit ever this year.

Quoting Flighty (Reply 18):
The best stimulus, at any rate, is a tax cut, preferably a permanent one. That money goes straight to the people, and straight into the economy. Cutting government, and cutting taxes would ironically stimulate the economy.

The tax cut option only works in conjuction with the actual reduction in government size and spending. Unfortunately many programs are written so as to not allow any reduction in spending year to year.

Quoting Avent (Reply 23):
But this was not your original argument.

Your reply covered more than my original statement. I did not address who was paying what rate in taxes, nor any war, you did.

Quoting Avent (Reply 23):
You argued Krugman was contradicting himself by changing his position. I just pointed out that there can be different reasons for deficits that might allow a reasonable person to agree with them in some instances, but not in others.

My original argument remains correct. During the Bush administraton deficits, according to Mr. Krugman, were wrong. Now they are correct although we are receiving no more in the way of assets for the spending than we were then.
Warm winds blowing, heating blue skies, a road that goes forever, I'm going to Texas!
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:06 pm

Quoting DXing (Reply 26):
My original argument remains correct. During the Bush administraton deficits, according to Mr. Krugman, were wrong. Now they are correct although we are receiving no more in the way of assets for the spending than we were then.

This was not your original argument. You are trying to reframe it now that it has been shown to be untenable; there was no mention of the role assets play in your original argument.

Also, you are implying the only justification for deficit spending lies in it involving assets. This is not true at all, and it was perfectly obvious the toxic investments did not on their face match the stimulus funding, and hence the intention of the stimulus spending was not to buy assets but to stave off economic collapse. Therefore Krugman would be reasonable in criticizing the recklessness of GWB deficits while tolerating deficits undertaken in desperation to avoid the collapse caused by GWB's spending.

[Edited 2009-09-03 09:11:32]
 
dxing
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:29 pm



Quoting Avent (Reply 27):
This was not your original argument. You are trying to reframe it now that it has been shown to be untenable; there was no mention of the role assets play in your original argument.

Sorry, but you are wrong. Mr. Krugman first denounced deficit spending in the Bush administration and now credits it in the Obama administration. Can't have it both ways. There is no good reason for deficit spending unless you are deficit spending for something that will turn into an asset. I have been clear in saying that deficts are wrong no matter whom is in charge. Unfortunately, Mr. Krugman is evidently inclined to try and give an excuse to help sell what is "wrong" as a "right".

Quoting Avent (Reply 27):
Also, you are implying the only justification for deficit spending lies in it involving assets. This is not true at all, and it was perfectly obvious the toxic investments did not on their face match the stimulus funding, and hence the intention of the stimulus spending was not to buy assets but to stave off economic collapse. Therefore Krugman would be reasonable in criticizing the recklessness of GWB deficits while tolerating deficits undertaken in desperation to avoid the collapse causwed by GWB's spending.

Deficits, whether incurred by any of the past 8 administrations or by the current one are simply wrong and calling them OK when it is plainly a political move is just as wrong. Mr. Krugman only came on the scene in the Bush administration but that does not absolve the previous administrations of the same bad practice. Please provide an example where deficit spending, whether personal or public, is a good thing when it does not involve debt incurred to aquire something that can at some time be listed as an asset?
Warm winds blowing, heating blue skies, a road that goes forever, I'm going to Texas!
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:38 pm



Quoting DXing (Reply 28):
Sorry, but you are wrong. Mr. Krugman first denounced deficit spending in the Bush administration and now credits it in the Obama administration. Can't have it both ways.

No, sorry, you are wrong; he can have it both ways and I explained it. You are just repeating your initial fallacy.

Quoting DXing (Reply 28):
I have been clear in saying that deficts are wrong no matter whom is in charge. Unfortunately, Mr. Krugman is evidently inclined to try and give an excuse to help sell what is "wrong" as a "right".

And so, because a nobel prize winner has a different perspective than you, they must be wrong?

Excuse me while I go and chuckle...
 
avent
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 4:50 pm

Quoting DXing (Reply 28):
Deficits, whether incurred by any of the past 8 administrations or by the current one are simply wrong and calling them OK when it is plainly a political move is just as wrong.

This is quite a novel theory. I have never heard anyone seriously argue the stimulus spending was primarily a political move without any possible benefit to a collapsing economy.

I do get a chuckle from your debating style:

1. Make a Right Wing assertion

2. when it's challenged, re-frame it (as in reply 17 where you switch to whether deficits are ever good)

3. When corrected, introduce new issues, such as the need for assets

4. Declare yourself the ultimate authority by injecting your 'self-evident' truths so you can pre-emptively dismiss nobel prize winner perspectives.

5. When corrected, restate the original false assertion and declare victory.

Very funny indeed!
[Edited to correct spelling]

[Edited 2009-09-03 09:58:54]
 
FlyDeltaJets87
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:10 pm



Quoting Baroque (Reply 20):
Best come to Australia for a shock. In 2007, in polls* IIRC around 60% of voters believed that additional government expenditure on health was preferable to a tax cut. The tax cuts were mostly in the cup of coffee and two biscuits class, but the money saved could have made a difference to our hospitals. And yes the electorate knew that and voted with wider interests in mind.

That 60% included both Labor and Liberal voters.

Of course the then Liberal government tried to buy the electorate with tax cuts, but lost when Labor (to our long term detriment) matched them cut for cut. And where did that get us - why in debt where do you think?

You need to get out more.

What your poll doesn't say is whether or not those who said they would have preferred for the government to keep the money to spend on healthcare would have received any money back. There are plenty of people in the US who would say "I want the government to keep the money and spend it on this" too, but they're the people who wouldn't get the money back directly. What they fail to see is how they get it back indirectly.

And when someone tells me "I'll pay more in taxes if I get more services", I politely tell them that nothing stops them from writing a bigger check to the government each year and telling the government to keep the change.  yes 
"Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
 
Flighty
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RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:15 pm



Quoting DXing (Reply 26):
Unfortunately many programs are written so as to not allow any reduction in spending year to year.

Oh certainly. That is why the Congress must perform "work" to actually accomplish that. They and the president do have a lot of power to make changes. Not just small changes, but changes of any size. When congress and the President say "it can't be done," it is a vexing statement, because together, they wield complete authority over the USA and its systems.

Quoting Avent (Reply 25):
Furthermore, if one is going to make the argument we can dismiss the likes of Krugman simply because the specific work he got the award for is not in deficit spending, it assumes he has no worthwhile perspectives in the area of deficit spending,

I applaud your attitude of deference in general to economics Nobel laureates. But many people doubt whether Krugman was given it on his merits, based on his gravity trade model paper, or whether it was just because he liked to criticize Bush a lot in the New York Times. It was probably some of both.

One thing we can say, is that Krugman's attitude employs a lot of incurious and anti-intellectual devices. He rejects many ideas that are proven to be correct, as "totally non-serious."

From a Jan. 19 blog post, Krugman wrote: "What’s been disturbing, however, is the parade of first-rate economists making totally non-serious arguments against fiscal expansion. You’ve got John Taylor arguing for permanent tax cuts as a response to temporary shocks, apparently oblivious to the logical problems..."

Anyhow, the reason why permanent tax cuts might help is because temporary tax cuts do not change rational expectations of future burdens. Actually a big temporary tax cut, or worse, a stimulus, might exacerbate rational expectations of burden by putting a $9T debt load on the country. Krugman is a way awesome economist but these topics remain opinion driven, in that multiple proofs can be made both ways and it is hard to know which direction will predominate. Experts disagree on Krugman. He has a right to say anything he wants though.
 
avent
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Joined: Fri Jan 23, 2009 4:13 pm

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:24 pm



Quoting FlyDeltaJets87 (Reply 31):
And when someone tells me "I'll pay more in taxes if I get more services", I politely tell them that nothing stops them from writing a bigger check to the government each year and telling the government to keep the change.

I don't get this. What's your point in politely telling them in response to their stating a willingness to pay for services, they could pay extra so the government could keep the change? Do you think they consider letting the government keep the change a desired service? Have you asked them if that's what they really think?
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:47 pm



Quoting FlyDeltaJets87 (Reply 31):
Quoting Baroque (Reply 20):
Best come to Australia for a shock. In 2007, in polls* IIRC around 60% of voters believed that additional government expenditure on health was preferable to a tax cut. The tax cuts were mostly in the cup of coffee and two biscuits class, but the money saved could have made a difference to our hospitals. And yes the electorate knew that and voted with wider interests in mind.

That 60% included both Labor and Liberal voters.

Of course the then Liberal government tried to buy the electorate with tax cuts, but lost when Labor (to our long term detriment) matched them cut for cut. And where did that get us - why in debt where do you think?

You need to get out more.

What your poll doesn't say is whether or not those who said they would have preferred for the government to keep the money to spend on healthcare would have received any money back. There are plenty of people in the US who would say "I want the government to keep the money and spend it on this" too, but they're the people who wouldn't get the money back directly. What they fail to see is how they get it back indirectly.

And when someone tells me "I'll pay more in taxes if I get more services", I politely tell them that nothing stops them from writing a bigger check to the government each year and telling the government to keep the change.

News item: R Wing US views do not encompass the whole world.

One example from 2006, a time when Beasley was leader of the Opposition and NOT popular so this poll is not a Howard v Rudd poll, which Rudd always won.

http://www.smh.com.au/news/national/...-alp/2006/05/21/1148150125977.html
TWO-THIRDS of voters have spurned the biggest tax cuts in decades, saying they would prefer spending on services, and giving Labor a solid lead over the Government in the wake of the budget.

The Herald/ACNielsen poll shows that even with Kim Beazley rating as voters' third choice as Labor leader, the Government has taken a post-budget knock and now trails Labor by eight points in two-party preferred terms.

While 52 per cent of respondents say the budget is good for the country, only 43 per cent say they will be better off personally and 68 per cent would prefer more spending on services such as health than on tax cuts.

The lukewarm response to the Government's $36 billion in personal income tax handouts over four years reflects a frequent finding in recent polls that voters prefer improved services to tax cuts.

The ACNielsen poll found the most favoured tax cut was a reduction in petrol excise, which was preferred by 45 per cent - well ahead of support for the budget handouts. The income tax cuts were backed by 30 per cent and the superannuation tax cuts by 23 per cent. Half of those polled nominated health as a preferred area for spending.

The downturn in support for the Government over the past month indicates the tax cuts have failed to assuage public dissatisfaction over the rise in interest rates and petrol prices, and the fiasco following the death in Iraq of Private Jacob Kovco.


There is a link to the actual poll but it appears to be deleted due to age.

Why not believe what you are told, it might just be true.

In other news, some countries have worked out that collective action by a government is more effective with matters such as health services than individual donations.
 
avent
Posts: 818
Joined: Fri Jan 23, 2009 4:13 pm

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 5:50 pm



Quoting Flighty (Reply 32):
Anyhow, the reason why permanent tax cuts might help is because temporary tax cuts do not change rational expectations of future burdens. Actually a big temporary tax cut, or worse, a stimulus, might exacerbate rational expectations of burden by putting a $9T debt load on the country. Krugman is a way awesome economist but these topics remain opinion driven, in that multiple proofs can be made both ways and it is hard to know which direction will predominate. Experts disagree on Krugman. He has a right to say anything he wants though.

I agree, but the issue here is whether Krugman is having it both ways, and it seems to me someone of his stature could certainly make distinctions between the use of deficits in different circumstances and hence criticize them in one, but tolerate them or see them as a necessary evil, in another, and hence it is very unfair to take a superficial approach and call foul because he makes these distinctions.

This is not to judge whether any application is correct but rather whether Krugman is sophisticated enough to see shades of gray and to not hold ideologically intransigent positions. It in not unreasonable to criticize deficits in general, but to tolerate them grudgingly as a last resort to prevent a meltdown.
 
dxing
Posts: 5859
Joined: Wed Nov 12, 2008 5:14 pm

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 6:53 pm



Quoting Avent (Reply 29):
No, sorry, you are wrong; he can have it both ways and I explained it. You are just repeating your initial fallacy.

He can say he wants to have it both ways if he so chooses to, and in doing so exposes himself to be the hypocrite that he is. You're explanation was just as hypocritical.

Quoting Avent (Reply 3):
I'd guess Krugmann would argue that there are two very different modes of running deficits here:

1. running deficits in order to break the back of a government you see as being too welfare oriented - all the while giving tax breaks to the wealthy - and waging wars deemed so important there is no need to raise taxes to pay for them

2. using deficits to try and prevent an inherited mess turning into a catastrophic meltdown.

As another poster put it, the Obama administration deficits are just leading to an even more catastrophic meltdown. Deficit spending is wrong no matter whom is doing it.

Quoting Avent (Reply 29):
And so, because a nobel prize winner has a different perspective than you, they must be wrong?

In this case yes and especially since it is such a politically motivated piece.
Warm winds blowing, heating blue skies, a road that goes forever, I'm going to Texas!
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 7:03 pm

Quoting Avent (Reply 8):
I'd guess there are those who still think Nobel prize-winners in economics have perspectives worth considering.

Yeah, such a worthwhile suggestion  

Let's inflate another bubble. That's how we'll "fix" our problems. This isn't just pushing the problem forward at all, it's solving it!  

I wonder how big a snowball we'll have when this scheme comes to an end. China already warned about borrowing like crazy and paying back with inflated dollars, this can't keep going on forever.

[Edited 2009-09-03 12:06:58]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
dxing
Posts: 5859
Joined: Wed Nov 12, 2008 5:14 pm

RE: Paul Krugman, Having It Both Ways.

Thu Sep 03, 2009 7:07 pm



Quoting Avent (Reply 30):
This is quite a novel theory. I have never heard anyone seriously argue the stimulus spending was primarily a political move without any possible benefit to a collapsing economy.

Now that is hillarious. I've heard plenty of people make that argument and with more than a grain of truth. There are simply too many "pork" projects in the bill to deny it was nothing more than a political payoff bag. In some sense I guess you can't blame the Obama administration since he provided the same level of leadership in the stimulus bill that he has in the health care debacle up to this point. But since he signed the bill into law he is ultimately responsible for allowing the money to fly out the door.

Quoting Avent (Reply 30):
1. Make a Right Wing assertion

Since I am condeming both Republican as well as Democratic Presidents who have participated in deficit spending, and would make the same claim about GOP as well as democratic lead Congresses, that certainly falls pretty flat.

Quoting Avent (Reply 30):
2. when it's challenged, re-frame it (as in reply 17 where you switch to whether deficits are ever good)

I guess you think no one will bother to go back and look. If you would care to point out where this statement has any fact to it please do. Wait, let me help you out. Please point out where I make any "switch".

Quoting DXing (Reply 17):
Quoting Avent (Reply 3):
I'd guess Krugmann would argue that there are two very different modes of running deficits here:

There is no good way to run a deficit, period. It was wrong in the Johnson, Nixon, Ford, Carter, Reagan, Bush 41, Clinton, and Bush 43 administrations and it is just as wrong in the Obama administration.

I still think it is rather sad that politicians campaign on how much the other guy spent and how wrong that was, and then spend just as much or more when elected.

Quoting Avent (Reply 3):
all the while giving tax breaks to the wealthy

I assume you are talking about the wealthy that still pay more than 50% of all income taxes in this country? BTW, I'm not wealthy and I got a tax break. The idea that the top 5 or 10% will continue to carry the other 90-95% on their backs forever, or that it is even right that they do so is also fairly humorous if not down right scary. Witness those wealthy individuals that are moving out of NYC due to the rate hikes. There comes a time when it's just better to change locals than to cough up any more.

At some point deficit spending has to end and the longer we delay it the worse of we will all be when it happens.



Quoting Avent (Reply 30):
3. When corrected, introduce new issues, such as the need for assets

The issues I have discussed past the OP were brought up by you.

Quoting Avent (Reply 30):
4. Declare yourself the ultimate authority by injecting your 'self-evident' truths so you can pre-emptively dismiss nobel prize winner perspectives.

Would you care to point to the post where I declare myself the ultimate authority? Or that I cite any opinion as a self evident truth?

Quoting Avent (Reply 30):
5. When corrected, restate the original false assertion and declare victory.

I guess when you are corrected you just decide to throw up whatever you can and hope it might stick. I await your answer as to when it is ever good to entertain deficit spending when nothing that can become an asset is involved, especially when you are spending someone elses money, in this case the taxpayers.
Warm winds blowing, heating blue skies, a road that goes forever, I'm going to Texas!

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