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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (103494)	2/8/2009 3:13:36 PM
From: Steve Lokness	Read Replies (3) \| Respond to of 542024

John My thoughts on Krugman starting with a quote from Cheney; ...Reagan proved that deficits don't matter" I suspect the cold black hearted Cheney is chuckling right now as the country stumbles into the economic woes. His people are fine. Pathetically, Cheney only looked at deficits as an election tool - not something that might harm - or benefit - America in the future. That obviously is not Krugman. But I think deficits do matter as they are the other side of the ledger, Austrians knowing that deficits matter, foresaw and warned that the economic abyss. The welfare state that Krugman endorses in a democracy is fine as long as the ledger is kept balanced. That is as long as the people can adjust their voting based on what they are willing to spend. But when deficit spending becomes a tool of the political, as it did with Cheney and it does with Krugman, there is no way to control it. The deficit doesn't matter, becomes a contest between the welfare state of the far left and the greed of people like Cheney. So Cheney offered up the Iraq war and piled on layers of debt that should make any centrist blush. They gave tax cuts that favored the rich and contracts in Iraq that favored their buddies, all the while encouraging us to throw a party at home. Why, because ..."Reagan proved deficits don't matter". ....Now if it is left up to Krugman, we bounced to the other edge of the political spectrum, and see how many favors we can pass on to the liberal left. That the almost 1 trillion dollars stimulus package is not enough in Krugman's eyes, shows that Krugman, like Cheney, must think that deficits don't matter. (More like 3 trillion with all of the TARP stuff and likely more to come). So we pile on more layers of debt. But what the politically deaf Krugman misses, is that by encouraging the democratic Congress to fill their favors (as Cheney did for republicans), they open the door for measures of economic inefficiencies to be introduced not only by the left but by the right. So we end up with a stimulus plan that really has little creation of jobs in it, but is a laundry list of both the left and the right. Fine, as long as deficits don't matter. Just as the economy is hopefully reinvigorated by the Keynesians, and just as it struggles to get its head above water, economist will have to remove the punchbowl to prevent inflation - even Krugman admits this. But how do you go into all these social spendings and pull them away from society? How do you politically tell people that we have to decrease unemployment payments and food stamp payments and the whole laundry list of social safety nets found in the stimulus bill? How do we deal with our major problems of energy independence, run away health care cost, global warming, and medicaid/medicare under funded obligations - and try to pay this huge debt bill? There is only one way and it is not the way of Cheney and it is not the way of Krugman. It is telling the American people the truth, that we have to at some point pay for what we want. We have to pay for these things because if we don't our economy will flounder. It is both sides working together to address real problems, instead of pretending that deficits don't matter. For just like the housing bubble where increased prices didn't matter - until they did. Debt won't matter ......until it does. And then its too late. Austrians get this. Ron Paul gets this. Mish gets this. Krugman doesn't seem to. If I'm wrong about Krugman - tell me how. If I'm wrong about deficits, tell me how they don't matter.