by Deb Cupples | In terms of knowledge, I am entire cities away from the ballpark of Nobel Prize Winning Economist Paul Krugman. Still, I often feel in synch with him.
Early this morning, I did a post called "House Republicans Favor Economic Failures over Obama's Stimulus Plan," which was largely about Republicans' bizarrely irrational calls for some of the same Bush-style corporate tax cuts that failed to create scads of jobs and heavily contributed to our massive national debt.
I just found Dr. Krugman's column from today, called "Economic Bad Faith," which logically refutes some of those Republicans' very specious arguments:
"[T]he obvious cheap shots don’t pose as much danger to the Obama administration’s efforts to get a plan through as arguments and assertions that are equally fraudulent but can seem superficially plausible to those who don’t know their way around economic concepts and numbers. So as a public service, let me try to debunk some of the major antistimulus arguments that have already surfaced. Any time you hear someone reciting one of these arguments, write him or her off as a dishonest flack.
"First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years....
"The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.
"Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.
"Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.
"The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.
"This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.
"Finally, ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.
"It’s true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn’t, because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.
"That’s why we’re talking about large-scale fiscal stimulus: it’s what’s left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesn’t know much about the subject — and therefore has no business weighing in on the debate — or is being deliberately obtuse.
"These are only some of the fundamentally fraudulent antistimulus arguments out there. Basically, conservatives are throwing any objection they can think of against the Obama plan, hoping that something will stick.
"But here’s the thing: Most Americans aren’t listening." (NY Times)
Frankly, I'd like to see House Minority Leader John Boehner have a two-hour, one-on-one debate with Dr. Krugman -- and see who leaves the event with egg all over his face.
Memeorandum has commentary.
Other Buck Naked Politics Posts:
* Krugman on the "Voodoo" Bank Bailouts
* Cleaning up Political & Corporate Culture Could Help Economy
* Are Guantanamo-Recidivism Statistics Fake?
* Real Bonuses Based on Fake Profits
You just reprinted the entire column, minus the first paragraph and the last two sentences?
Posted by: Undertoad | January 26, 2009 at 09:29 AM
Hi Undertoad,
You make a solid observation: I certainly did quote a lot of Krugman's article.
That's because -- as my blog-post title ("Krugman Refutes...) reflects -- the topic of the post is Dr. Krugman's response to GOP arguments.
If you're interested to MY opinion of Republican politicians' bizarre affinity for corporate tax cuts, you can follow the link at the top of my post on Krugman.
Posted by: Deb Cupples | January 26, 2009 at 11:28 AM