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Krugman vs Austerians
June 24, 2015 6:30am by Admin Tim
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No Krugfest would be complete without his claim that the $700b stimulus didn’t work because we didn’t spend the $1.2t he said was needed only to find out well after the fact we did indeed spend to his $1.2t target and it still didn’t work.
Invictus probably didn’t include that because its bullshit.
You mean $1.2T was spend and it had no stimulative effect on the economy? What alternative universe do you come from – and do things fall up there?
The actual spending was about $0.8T and the effects (as you so nicely point out) was $1.2T worth of economic activity. In other words (and I am glad we agree) the multiplier of the stimulus was 1.2/0/8 or positive 1.5. So for every dollar spend by the government we got $1.50 economic growth – I am glad you agree with that. The positive multiplier was exactly what Krugman postulated (and the right wing disputed) so he was right. He also said that a $2T predicted shortfall in demand could not be completely countered by a $0.8T stimulus and again he was right (the economy has been and still is below trend). In contrast China did institute a stimulus that completely covered the shortfall and they never even entered a recession. The GDP formula is a 5’th grade math problem and anybody can solve it if they really want to, rather than trying to play politics. Every time a recession has hit under a GOP president we have had stimulus packages, would they do that if they really though it doesn’t work. No the reason they didn’t want Obama’s stimulus was that they didn’t want that Black man in their White house to succeed.
According to the U of C survey of economists …the stimulus did work! Only in the Fox News and WSJ bubble did it NOT work…You know the bubble that is still standing by the “hyper-inflation, debt threat interest rate spike, expansionary austerity and the islamo-socialist stock mkt crash” world to emerge any day now.
On a more serious …um, okay, a more factual note.
Donkey Kong Economics
Bloomberg blazes new frontiers in article illustration …I guess being portrayed as a master of Mixed Macroeconomic Arts isn’t the worst thing in the world.
One thing, though … My early call that Iceland was experiencing a better crisis than anyone else has held up very well.
Benn Steil got in a good kick but was knocked out in the next round.
I read Krugman’s blog every day because he is the majority of time right in his predictions. It has been useful to me to understand the investment climate as it currently exist. This is not a conservative or liberal thing with me but a science thing.