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FreeMarkets (40.99)

I thought Krugman said ...



May 14, 2011 – Comments (11)

"Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong.

It’s too bad, then, that these days you’re not considered serious in Washington unless you profess allegiance to the same doctrine that’s failing so dismally in Europe."



So if Krugman declared victory against those advocating austerity, do you think he could explain this? 

"The euro-zone economy expanded in the first quarter at its fastest pace since 2007, according to data released Friday, as booming growth in Germany led the way and highlighted the stark divide between the region’s robust core and the debt-troubled periphery." 
German Economy Boooms!

It seems there are two economy's in Europe.  The debt riddles economies (PIGS) are struggling, while the economies that have followed fiscal discipline for years are booming.

Sure, Krugman loves to declare victory six months after a country begins austerity, but he clamps up pretty tight after a couple of years.  Why?  Because he has been trained in economic theory that doesn't have an answer for this.  He is trained to believe money is what you print, not the savings of work.  His Keynesian model is flawed, but he is incapable of seeing his life's beliefs banished by reality, so he shuts up and tries to find some other Socialist agenda item to write about.

What, you ask, did he write about this weekend?  Here is the first paragraph: "Is it just me, or has Verizon Wireless 3G service along the Northeast Corridor gotten significantly worse over the past few months? There were always gaps, but they seem to have multiplied — no signal much of the way between Baltimore and Washington."

Very impressive Mr. Nobel Prize, I seem to think I saw the same thing on my friends Facebook mobile update two days ago.

11 Comments – Post Your Own

#1) On May 14, 2011 at 11:17 PM, buffalonate (56.54) wrote:

Germany cut back on their stimulus measures but they are still running big deficits to stimulate the economy.  The economies that tried to balance their budgets hurt economic growth.

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#2) On May 14, 2011 at 11:20 PM, AvianFlu (< 20) wrote:

Krugman is the reason I grind my teeth!

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#3) On May 14, 2011 at 11:50 PM, TMFAleph1 (92.49) wrote:

There is a difference between fiscal discipline and fiscal austerity.

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#4) On May 15, 2011 at 2:49 AM, ajm101 (< 20) wrote:

I don't get it... he complained about VZ coverage, and so did your friend... why is that bad?  It's his Times blog, not his column.  And he had 5 other posts on Saturday.

Otherwise, I think you're misrepresenting the cause of the problems in Europe and Krugman's position.  But I'm not going to change your mind, clearly.

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#5) On May 15, 2011 at 12:01 PM, ETFsRule (< 20) wrote:

FreeMarkets: Germany had quite a lot of stimulus, whick PK points out here and here.

It's pretty much universal: countries that had stimulus programs are outperforming countries that tried "austerity measures".

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#6) On May 15, 2011 at 1:07 PM, ajm101 (< 20) wrote:

Freemarket - one more thing.  You do realize that the Verizion post was a slight dig at conservative blogger Ann Althouse, right?  She complained that a Blogger service outage that took down her site was a conspiracy carried out by all the liberal Google employees:

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#7) On May 15, 2011 at 3:58 PM, FreeMarkets (40.99) wrote:

@ ETFsRule & @TMFBullnBear
"Germany, however, has decided to cast its lot with fiscal prudence. It has managed rising growth and falling unemployment, while putting together a plan for a nearly balanced budget within six years."

Having a hard time believing a balanced budget is what Krugman would call "stimulus"

@ajm101 - I don't follow blogger gossip.



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#8) On May 15, 2011 at 5:54 PM, buffalonate (56.54) wrote:

They have a plan for a balanced budget in 6 years.  Why on earth would Krugman or anyone else want stimulus 8 years after the stimulus started.  Keynesian stimulus is only intended to be used for a couple of years after a severe recession and then you wean off the stimulus and move towards a balanced budget.  That is textbook Keynesian stimulus. 

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#9) On May 15, 2011 at 6:11 PM, TMFAleph1 (92.49) wrote:

Having a hard time believing a balanced budget is what Krugman would call "stimulus"

First, that the quotation refers to a "nearly balanced buget." Second, they are almost certainly referring to balancing the primary budget. I'm not arguing that Germany is resorting to massive fiscal stimulus, but we are very far from austerity.

Alex Dumortier

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#10) On May 15, 2011 at 6:58 PM, ETFsRule (< 20) wrote:

"Having a hard time believing a balanced budget is what Krugman would call "stimulus""

What in the world are you talking about?

Germany's Deficit Doubled in Quarter

German budget deficit to break EU rules in 2010

Germany violates EU deficit rules for first time since 2005

Germany's Government Deficit Soars By Over 100%

See the German Budget Deficit With Your Own Eyes

It's pretty hilarious that you're calling them a model of fiscal discipline, just because they're starting to talk about possibly having an almost-balanced budget in a year or two.

They ran a massive stimulus program, and it worked.

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#11) On May 15, 2011 at 9:27 PM, whereaminow (< 20) wrote:

Germany Says Its Spending Package Is Already Big Enough

The funny thing here is that, like America, if Germany just continues its bloated government spending the deficit will continue to spiral out of control.

Unlike America, Germany didn't see the cliff in 2008 and say "hey, let's run towards it faster!"

So yeah, Germany continued its old ways of jogging slowly towards fiscal doom.  That's not austerity. That's not a balanced budget.  That's the normal course of democratic socialism.

America likes the fast track. So it "stimulated."

Compare change in rates of government spending between the two countries.  America spent way more.  Got way less.


Well because Keynesianism is a cracker jack theory for the weak minded.  Kind of like Scientology.  


It consumes real resources that could have been put to use by real people.  You, me, ETFsRule, Alex, etc.

Economics is the study of real people and their actions. Keynesianism is a joke on the physics profession.

Go Bulls.

David in Qatar

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