Paul Krugman: Liar or Bozo?

Dumbing Deficits Down
New York Times, 2011-03-11

Like anyone who writes regularly about
what passes for economic and fiscal debate in American politics,
I’ve developed a strong tolerance for nonsense.
After all,
if I got upset every time powerful people were illogical and/or dishonest,
I’d spend every waking hour in a state of raging despair.

Yet there are still moments when I find myself saying,
“They can’t really be that stupid,” or maybe,
“They can’t really think the rest of us are that stupid.”

[Time to look in the mirror, Paul.
Here are some of Krugman's further remarks, with my comments.]

First, the nation is not, in fact, “broke.”
The federal government is having no trouble raising money,
and the price of that money — the interest rate on federal borrowing —
is very low by historical standards.

[The reality:
The nation is already in hock to the tune of $14 trillion,
and adding to that debt at the rate of one or two trillion per year.
Further, that rise in the debt load is being sold on the grounds that
it is necessary to keep the economy from sinking into a state
that is even less politically acceptable.
If a household could only survive by borrowing more and more each year,
anyone can see that this can not go on indefinitely,
and is leading straight to and inevitably to bankruptcy.

As to his statements about raising money and low interest rates,
how many people in the ghetto were sold on getting deeper and deeper in debt
by exactly the same argument?
How much of the current problems of individual Americans were caused
by exactly the same argument?
"Easy money!" "Low interest rates!" "Borrow now!"
Who thought about the future? The party could never end.

Getting into debt is easy.
But that debt must be either refinanced or paid off.
When the time comes to refinance, to roll over the debt,
the new loan must be taken out at the market rate then prevalent.
The low interest rates now are no different from
the "teaser" rates that were used to lure in so many suckers
into feeding the profits of the finance companies.
Just so, the debt America is taking out now,
at those "historically low interest rates",
will in the future need to be refinanced at rates that will punish future Americans and lead to the profits of the lenders,
many of whom just happen to be Krugman's ethnic kinsmen,
like George Soros.
That Krugman cannot point out that "historically low" interest rates
only represent a trap
(unless refinancing the loan is not contemplated)
indicates Krugman's fundamental mendaciousness,
or his desire to use his cleverness and cunning
to make future America the helpless and hapless prey and pawn of the speculators.

Back in the 1950s children were warned to beware of “the old dope peddler.”
Now, in the 2000s, all Americans need to beware of
an equally invidious threat to their future welfare: “the old debt peddler.”
Like Paul Krugman.]


Congress could, with a stroke of a pen, cut Social Security benefits in half.
But it couldn’t do the same with health spending:
Medicare can’t suddenly start paying to replace only half a heart valve
or mandate that bypass operations stop halfway through.

[What a sick analogy!
The classic rhetorical trick of the false analogy.

There are many other ways to cut health spending.
All it would take is to
tighten up the standards for what health care Medicare and Medicaid will pay for,
beyond the current standard of:
Whatever the patient wants and will enrich the health profession.
That would, without the slightest doubt,
cause screams of anguish from all those overpaid medical professionals
($500K/year radiologists, e.g.)
and those people who will not lift a finger (or go for a walk)
to solve their own health problems instead of making other people pay for them.
I.e., practice individual responsibility.]

Limiting health costs, therefore, requires a smarter approach.
We need to work harder on prevention, which can be much cheaper than a cure.
[Are you willing to make prevention an individual responsibility,
rather than a communal and social one?]

We need to find innovative ways of managing health care.
And, above all, we need to know what works and what doesn’t
so that Medicare and Medicaid can say no to expensive procedures
with little or no medical benefit.
“So-called comparative effectiveness research” is central to
any rational attempt to deal with America’s fiscal problems.

But today’s Republicans just aren’t into rationality.
They claim to care deeply about deficits —
but they’ve spent the past two years
putting cynical, demagogic attacks
on any attempt to actually deal with long-run deficits
at the heart of their campaign strategy.

[Actually, I agree with Krugman on all the points he just made.
The Republicans are completely wrong in avoiding the need to cut medical spending.
And yes, that means what they call rationing.
What is the alternative?
Just spend as much as the health care industry can figure out ways to sell to patients?
What is to stop the health care industry from absorbing more and more of the economy?
And what does that do to American competitiveness,
with societies that are less controlled by the allies of the health care industry?]