It’s difficult to know where to start with this delusional banter, but I’m not sure it matters. Nearly everyone of his premises are wrong.
So, I’m reading Krugman’s banter about how we’ve got a handle on our deficit spending. That’s a shocking assertion all by itself, so we can start there.
I’ll present a graph which show our past, present, and estimated deficits and I’ll include our interest payments on our debt. We’ll need to refer back to it from time to time.
Here’s what Krugman stated in a NY Times Op-ed….
The budget deficit isn’t our biggest problem, by a long shot. Furthermore, it’s a problem that is already, to a large degree, solved. The medium-term budget outlook isn’t great, but it’s not terrible either — and the long-term outlook gets much more attention than it should.
It’s true that right now we have a large federal budget deficit. But that deficit is mainly the result of a depressed economy — and you’re actually supposed to run deficits in a depressed economy to help support overall demand. The deficit will come down as the economy recovers: Revenue will rise while some categories of spending, such as unemployment benefits, will fall. Indeed, that’s already happening. (And similar things are happening at the state and local levels — for example, California appears to be back in budget surplus.)
Spoken like a true Keynesian. Now, look back up at the graph. The only reason why Krugman believes our deficit spending is solved (sort of) is because he thinks the economy is going to take off. How he comes to this conclusion isn’t stated. He simply thinks it will. Now, it is true, if the economy ramps up, then revenues from taxes will increase and if spending remains the same or increases at a slower rate than revenues, then the deficit spending will be reduced. But, look back up at the graph. Even if our economy takes off and flies, (refer back to prior post on GDP projections) we’ve got a huge problem directly related to our deficit spending. In rational real world, we like to call this “interest on debt“.
You see, regardless of how little our deficit spending is, the interest on debt continues to grow until we decide to pay down our debt. By 2017, just 4 short years from now, the interest is expected to be over $500 billion. But, that’s if, and only if, our economy soars and our deficit spending is reduced. If it doesn’t, then our interest on our debt will be even more than that.
Krugman continues his babbling……
Still, will economic recovery be enough to stabilize the fiscal outlook? The answer is, pretty much.
Recently the nonpartisan Center on Budget and Policy Priorities took Congressional Budget Office projections for the next decade and updated them to take account of two major deficit-reduction actions: the spending cuts agreed to in 2011, amounting to almost $1.5 trillion over the next decade; and the roughly $600 billion in tax increases on the affluent agreed to at the beginning of this year. What the center finds is a budget outlook that, as I said, isn’t great but isn’t terrible: It projects that the ratio of debt to G.D.P., the standard measure of America’s debt position, will be only modestly higher in 2022 than it is now.
I haven’t checked the link Krugman provided. But, if it labels the cuts and tax increases as “major deficit-reduction actions“, then we know it isn’t worth looking into. Yes, they are big numbers which many have a hard time wrapping their head around, but, this is a sleight-of-hand by Krugman. He uses the big numbers and then talks about ratios. So, let’s put this in a ratio perspective. As he stated, these numbers are the culminate over 10 years. I don’t have a source for projected spending beyond 2017, but, we can extrapolate the spending using the rate of spending increases for the last 4 years and the projections of the next 4. Over all, the spending increases (real and projected) average in increase of *3.2513% annually. (I’ve excluded the huge increase seen going from 2008 to 2009)
So, for the next 10 years we anticipate a total spending amount to be $45.5 trillion. So, our “major deficit-reduction actions“, totaling $2.1 trillion is 4.6% of our total spending. 2012 saw our deficit spending to be nearly 35% of our total spending at $1.32695 trillion. Or, broken down yearly, if the cuts and taxes are directly applied to our deficit spending, we will see the deficit drop to $1.11 trillion. Major? This taxes and cuts do nothing of any significance towards the overall outlook of our debt, deficits, and interest obligations going forward. Nothing. Krugman either has little or no grasp of the numbers or he’s being dishonest.
Krugman then banters on about how we shouldn’t worry about what’s going to happen in a couple of decades, and that’s it’s Bush’s fault anyway. Which, is a rather bizarre method of dealing with problems, but typical of a leftist. He focuses mostly on Social Security and mentions Medicare. To be sure, these are problems we need to address and soon. Unlike Krugman, on things that we know will happen in the future, like Social Security outlays, we should prepare for them, as opposed to ignoring them and letting a crisis develop first. But, we shouldn’t pretend these are the only places we can curb our future spending.
Then, in the most bizarre twist of logic, he writes this piece of idiocy….
The point is that the case for urgent action now to reduce spending decades in the future is far weaker than conventional rhetoric might lead you to suspect. And, no, it’s nothing like the case for urgent action on climate change.
Huh? We shouldn’t prepare for a crisis we know will happen, but we need to urgently move on something that which is only a dark fantasy for Malthusian Marxists? His link takes us to more banal mendacity.
In it, he tries to make the case that entitlement spending and GHG’s aren’t the same. True enough, they’re not. The Social Security funds are quantifiable, and estimating when we run out is easy enough to do and the consequences are real. Climate change? Well, us skeptics have known the climate is constantly changing, we’ve adapted quite well to the constantly changing climate, and there’s nothing we can do to control the changing climate. Nothing.
One fairly common trope in budget discussions – I’m pretty sure I’ve done it myself, somewhere along the line – is to compare attitudes toward fiscal issues and those toward environmental issues. The usual version, which I must have used, is to compare attitudes toward the long run: pointing out how strange it is that many people profess to be deeply concerned about the state of the Social Security trust fund in the year 2037, while being apparently indifferent to the state of the climate around the same time, which is all too likely to involve things like a permanent drought in the southwest and so on. ……
So, let’s start with climate change. Serious people are and should be deeply worried, indeed horrified, by the lack of action on greenhouse gases. But why? Why not just assume that when climate change becomes undeniable, we’ll do whatever is necessary?
Earlier in the post, I pointed out a sleight-of-hand technique Kruman uses. He uses big numbers but doesn’t put them in perspective for the reader. This is also a common technique for the climate catastrophs. We see it again….
The answer, first and foremost, is that each year we fail to act has more or less irreversible physical consequences. We’re pumping around 35 billion tons of carbon dioxide into the atmosphere annually; …. and its consequences for warming and sea level rise will last even longer. So each year that we fail to act has a direct physical impact on the future.
Warming and sea level rise…..never mind that’s been addressed so many times here and elsewhere it isn’t worth the time to demonstrate how delusional it is to express such silly thoughts. But, notice the big number. What does 35 billion tons mean in context to our atmosphere? Time for my new CO2 graph, again!
There, that’s what pumping 35 billion tons of CO2 into the atmosphere means.
The only people denying that the climate changes are the nutters who expect our climate to be static.
There’s also an investment aspect: each year that we fail to get the incentives right, people commit limited resources to the wrong technologies, especially coal-fired power plants instead of wind, solar, conservation, whatever. Again, these choices have a physical impact on the world of the future.
He’s exactly backwards here. Wind energy technology is as old as coal gen plants. It was rejected as a proper source of energy over 100 years ago, and it’s still just as expensive and unreliable as it was then.
He then goes back to Bush bashing……
But we didn’t; Bush squandered the surplus on tax cuts and unfunded wars (and was, with notably rare exceptions, cheered on by the very people now lecturing us solemnly on the need to cut entitlements). Now the baby boomers are retiring fast, and as far as I can tell none of the deficit scolds are pushing for a big effort to pay debt down over the course of the next few years.
This is fascinating. We’ve had years of arguments over spending, debt ceilings, budgets, deficits, and Krugman is saying that no one is pushing to pay the debt down? Paying the debt down isn’t even an option right now until we rid ourselves of the deficit spending. Now, as to the Bush bashing, it is true, Bush spent way too much money. Now scroll back up to the first graph. How does someone like Krugman live with his serial dishonest, hypocrisy and duplicity? Sure, Bush’s spending was bad. Tripling the deficit spending isn’t? I readily admit that I’m partisan. I expect that the thoughts and ideas expressed here are slanted to a conservative perspective. But, there’s no way I can point to one president’s spending and blather about squandering, without noting the more extreme squandering which is occurring today!
And, for the record, Paul, I’m advocating paying down the debt. In fact, I’m sounding the alarm bells. If we don’t do something about our debt (which means we have to do something about our deficit spending) then by about 2020, the interest on our debt will be one of the, if not the largest expenditure of our federal budget.
What this would mean is that we will not have the resources to deal with real problems of the future like our Social Security running out of funds or even imaginary problems like climate change. There just won’t be any money left over to do anything. And this is Krugman’s advocacy.
Krugman has one and only one reoccurring theme. Spending under Bush was bad, spending otherwise, is good. Do people believe his nonsense?
*Note: The projected annual increase of 3.2513% is too high to limit deficit spending unless the economy grows faster than that percentage. It will not on average do so, unless we limit the liabilities we have for private investment.