Krugman Responds With More Nonsense

posted by Nima

October 12, 2010 · Posted in General Economics 

OK, folks. I will make this quick and easy, just because I prefer to spend my time dealing with interesting, intelligent, curious, and unbiased people.

As I wrote yesterday, Krugman said that government spending hasn’t surged. I presented numbers that show government spending in relation to all other spending, in other words, how much government involvement in all our activities has increased and it shows that it has posted the biggest rise since WW2.

Then he writes a response saying that relative numbers don’t matter and that we have to look at absolute numbers. Why that is the case of course he doesn’t bother to explain. It is because he says so. Fine, that’s nothing new from the guy. So kudos for being consistently pathetic.

So let’s make this argument as easy as possible for him. Let’s assume relative numbers don’t matter and all that is relevant is absolute numbers, completely disregarding everything else that happens in the economy. He goes on to say:

What’s going on? Yes, that’s right: it’s what happens when you divide by GDP in a time of terrible economic performance. Spending hasn’t surged; in fact, it grew more slowly in the two years after Lehman collapsed than in the two previous years, despite a sharp rise in spending on safety-net programs. Instead, GDP growth has plunged.

OK, so let’s look at absolute government spending YoY growth figures over the past 24 years:

1986 6.08%
1987 4.01%
1988 6.43%
1989 7.40%
1990 9.59%
1991 6.54%
1992 4.99%
1993 2.61%
1994 3.90%
1995 4.39%
1996 3.15%
1997 3.53%
1998 3.34%
1999 4.43%
2000 5.96%
2001 5.38%
2002 7.56%
2003 6.99%
2004 5.17%
2005 6.93%
2006 6.69%
2007 4.15%
2008 8.83%
2009 10.11%

In particular I would like you to take a look at the 2009 number, the year after the Lehman collapse. An increase larger than any during the past 24 years. Also, have a look at the two years prior to the Lehman collapse: 6.69% and 4.15%.

I repeat what Krugman said:

Spending hasn’t surged; in fact, it grew more slowly in the two years after Lehman collapsed than in the two previous years.

Naturally, he’s now gonna write a response apologizing for his mistake, as he always does when reality proves him wrong.

Haha :) Just kidding …

Addendum:

I hope that people don’t think I am trying to say that economic policy under President Obama is exceptionally bad. Some people seem to think that it destroys my case when they say that government spending in the past has also grown and that we are just on the normal trend.

I say: So what? All that shows is that economic policy has been consistently bad under all past presidents. I have never lauded the US’s economic policies under ueber-tards like G.W. Bush or Bill Clinton, now have I?? Whether spending grows by 10% this year, 8% that year, etc., these are all petty little minutiae, dwelled on by petty little people. I don’t even believe the President has very much pull in this whole process.

A small number of people each individually have a huge marginal interest in the growth of specific programs, while the majority of people who fund this growth, each of them at a marginally small percentage, have very little vested interest in the elimination of particular individual programs. This creates a mismatch in incentives that brings about the inevitable.

It’s the natural and predictable progression of things so long as people believe in the necessity of a government. There is nothing new, unknown, or surprising about this. There is nothing different under a black, an illiterate, or a horny president. We are being fed the same shit sandwich year after year, only that the turd gets bigger and bigger.

To see people chow down on that thing while discussing minutiae, while debating this program or that law, while factoring out TARP and adding up numbers as they see fit, while lauding this master and condemning that master …

Come on, people. It really makes you look small, silly, petty, and bigoted. Get the big picture. To hell with smallness and pettiness! Life is short and you shouldn’t waste it being a cogwheel in a machine that is bound to blow up. You owe it to your children and their progeny. Because I guarantee you, they will have a lot of questions looking back at an era that is ending ….

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