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Title: Morning Examiner: Quake exposes Keynesian fraud
Source:
The Washington Examiner
URL Source: http://campaign2012.washingtonexami ... -quake-exposes-keynesian-fraud
Published: Aug 24, 2011
Author: Conn Carroll
Post Date: 2011-08-24 10:17:53 by Happy Quanzaa
Keywords: Obama-doma-ding-dong, Obamanomics in Action, Obamatuer Hour
Views: 2655
Comments: 4
Mere minutes after the earth stopped shaking yesterday, The Examiner‘s Tim Carney tweeted out: “Krugman says it wasn’t big enough.” Carney was making light of New York Times columnist Paul Krugman’s faith in Keynesian economics, which preaches that when the economy is not utilizing all of its productive capacity, increased spending on anything, even digging ditches, can increase economic growth. Just like Krugman has been arguing that President Obama’s $821 billion stimulus was not big enough, Carney mockingly predicted that Krugman would also complain that the earthquake failed to do enough damage to justify a large rebuilding spending spree. Four hours later, Krugman lived up to Carney’s joke, writing on his Google+ account: “People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.” Some thought Krugman’s pining for more damage was so outrageous that the Google+ post was a hoax. Maybe it is. But Krugman’s quake statement is perfectly in line with everything else he has ever said on the subject. After 9/11, Krugman wrote: “Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good.” In 2008 he said on This Week: “it took an enormous public works program known as World War II to bring the economy out of a Depression.” And just recently Krugman suggested that massive government defense spending to prevent a fictional alien invasion could also spur economic growth. But what happens when the aliens don’t attack? Wouldn’t all that spending on anti-alien rays be wasted? Yes. But the Church of Keynsianism doesn’t care. As long as government policy is driving up spending, it doesn’t matter what the government spends the money on or what else gets destroyed in the process. This is the same thinking that drove the Obama Administration’s Cash for Clunkers program. Over 500,000 perfectly operational cars were destroyed in an effort to create more spending in the auto industry. But the program proved to be a miserable failure. Studies have since shown that the the car-destroying program did not create any additional spending. It only shifted when that spending took place. But while Cash for Clunkers created no economic growth, it did make many low-income households worse off. With hundreds of thousands of used cars now off the market, used car prices shot up. Now it is harder for millions of Americans to get where they need to go. Hopefully this earthquake, and Krugman’s pining for more destruction, will help disabuse more in Washington of the Keynesian myth.
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#1. To: Happy Quanzaa (#0)
Didn't stop Reagan from the arms build up against the USSR threat, did it?
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Top • Page Up • Full Thread • Page Down • Bottom/LatestBut what happens when the aliens don’t attack? Wouldn’t all that spending on anti-alien rays be wasted?
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