The following letters are in response to our interview with Paul Krugman, which appeared last week:
Who still thinks the Keynesians are relevant? - the Ivory Tower Ivy Leaguers, I guess. The theory has been disproved many times over, yet those who would want to control others still deem it viable from a theoretical perspective. Government spending is supposed to put money in our pockets to spend and ”stimulate” the economy. Government cannot just inject money; it has to come from somewhere.
So they borrow it, from us!
Hoover tried it by increasing spending 47% in four years. He got lower growth and higher unemployment. Ford tried it and even George W. Bush sent us checks to stimulate the economy and got nothing. Japan has tried since the early 1990’s and also has nothing to show for it besides increased debt.
In the future, let’s keep reality in mind. We don’t need to keep repeating our past mistakes. Mr. Krugman’s comments remind me of a quote from John Kenneth Galbraith: “The function of economic forecasting is to make astrology look respectable.”
I just finished reading your interview with Paul Krugman and I am not surprised by his answers. Krugman has always preached the same gospel – bigger government is better for America. What did surprise me were the softball questions that were asked. If we are attempting a fair debate, at the very least Professor Krugman should have been asked at least these types of questions:
- If massive deficient spending creates employment, why didn’t it work during the Bush II administration? They spent nearly half a trillion and employment dropped.
- Can you give us an actual example of when, where and how massive government spending has revived an economy successfully in the past? If so, are we following that guideline?
- With home prices still falling and automotive sales plummeting, how does government intervention do more than just artificially prop up prices and sales?
- What is the ultimate cost to Americans for becoming a borrower nation rather than a lender nation, especially when our largest lender is China?
- Is this stimulus just saddling more and more debt on the children of our nation and how are we ever going to pay it all back?
People like Krugman are highly influential in politics and they need to be asked the hard questions as well as the easy ones.Donald F. White, CLU ChFC AEP
Treasure Coast Financial
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