Self Inflicted Wounds

Paul Krugman is always wanting to have the government spend money to “stimulate the economy” and always claiming that it works, but every once in a while he slips up and shoots himself in the foot by admitting that it doesn’t work. That’s the problem with people who are paid to talk, they almost always talk too much and drop verbal clankers.

In a blog post today, Krugman is talking about the conflict between the public’s desire to balance the budget and its desire to have the government spend money to create jobs; a conflict caused by having Republicans and Obama screaming at them in one ear and Paul Krugman screaming at them in the other ear, although Krugman doesn’t say that. He seems to think that those two incompatible desires arise in the bosom of the public through, I don’t know, osmosis or something.

So he talks about how in the 1930’s the public was freaked out about New Deal spending and cites polls illustrating that people in that era wanted FDR to knock it off and balance the federal budget, which he did. The result was not World War Two, as most people seem to think, but another recession which preceded that war.

“The key point,” Krugman says, “is that when FDR tried to give voters what they thought they wanted, he plunged the economy back into recession.”

So even Paul Krugman sometimes admits that the government spending to “stimulate the economy” doesn’t have any lasting effect, and that as soon as the government stops spending money like a drunken sailor the economy promptly falls on its ass again. The claim that government spending will only be needed until the economy somehow recovers to the point that the government spending is no longer needed is debunked by Paul Krugman’s own words. Cool.