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Deficit alarmists are a bunch of Chicken Littles

Nobel Prize-winning economist Paul Krugman NAILS IT:

Back in the 1950s three social psychologists joined a cult that was predicting the imminent end of the world. Their purpose was to observe the cultists’ response when the world did not, in fact, end on schedule. What they discovered, and described in their classic book, “When Prophecy Fails,” is that the irrefutable failure of a prophecy does not cause true believers — people who have committed themselves to a belief both emotionally and by their life choices — to reconsider. On the contrary, they become even more fervent, and proselytize even harder.

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[A]t every stage of our ongoing economic crisis — and in particular, every time anyone has suggested actually trying to do something about mass unemployment — a chorus of voices has warned that unless we bring down budget deficits now now now, financial markets will turn on America, driving interest rates sky-high. And these prophecies of doom have had a powerful effect on our economic discourse.

(Snip)

[T]he prophets of fiscal disaster, no matter how respectable they may seem, are at this point effectively members of a doomsday cult. They are emotionally and professionally committed to the belief that fiscal crisis lurks just around the corner, and they will hold to their belief no matter how many corners we turn without encountering that crisis…. They’ve been hugely, absurdly wrong for years on end, and it’s time to stop taking them seriously.

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6 Comments

  1. This article would make me laugh if it wasn’t so sad. But it is typical liberal blather. His argument is basically “nothing to see here people, everything will be fine, move along now.”

    Kind of like when Bush told people to go shop to try and blunt fiscal disaster. Or people were told to sign mortgages that any sensible person would have known were going to be disasterous.

    Let’s see what happens with our bond rating when we go “off the fiscal cliff”.

    The difference between “fiscal alarmists” and the usual apocalyptic doomsayer is that we have a living, breathing example of our future right across the Atlantic. I wonder if some Greek (or other PIIGS) columnist was writing the same kind of bunk about the PIIGS economies and debt curve 10 years ago?

  2. doc: Why don’t you try disputing Krugman’s specific points?

    But, of course, you can’t. You can only peddle blather. You and your Republican friends cling to the demonstrably false theory that government austerity can create jobs and improve the economy. When was the last time that worked?

  3. Again, how much debt is too much? Unless Krugman can answer that, his opinions are not worthy of consideration.

  4. What specific points?

    His argument is like that of the functional alcoholic.

    You know, the guy who stops by the bar after work each night and drinks a little bit more each night as time rolls on. He gets in the car, drives home and sleeps it off and reports for work the next day.

    It used to be a beer or two with the guys, but now he’s up to 5 or 6 beers and a couple of shots each night. But hey, he has never had an accident and he makes it in time for work most days.

    The only thing is, on Christmas eve he keeps the party going (because, after all, he deserves a couple of more drinks on the holiday) and then get’s in the car to weave his way home and kills a family of four who are on the way to Grandma’s house to celebrate.

    Of course he’s not really hurt at all, but when he’s checked out at the local hospital, prior to his booking on manslaughter charges, they tell him that his liver is shot from the ever increasing alcohol intake and he will probably be dead in 6 months unless he can get a liver transplant.

    The drinking and the partying were all really fun and seemed like a good idea at the time……until they weren’t any more.

  5. The election is over and fortunately the majority didn’t buy into the GOP baggers constant threat that the economic world as we know it is going to end or Doc squalling about his tavern concerns.

  6. You might want to consider eating your gyros without the onions Stevo.

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