Puff again, with feeling

I’m no economist, but the column by Paul Krugman in the Times today may be the most extraordinarily inane piece of analysis I have ever read. He seems sincerely to believe that yet-more-excessive government spending (?!) will actually stimulate the economy, whereupon (and not before) it will become safe for the government to start saving money. The best I could gather about the details of his theory is that the government can create jobs by spending, and put money back in people’s pockets by cutting healthcare costs. Very well, let us hypothesize that this succeeds. There is no mention of the fact that jobs created by government money must also be sustained by government money, so how does this help us ever get around to government saving? No mention, either, of the fact that, while reducing healthcare costs might perhaps put some money back in the consumer’s pocket, the whole point of economic stimulus is to get that money back out of the pocket and into the market, with the result that in a few years our consumer is broke again and – mirabile dictu – eager for a government bailout. We have created an economy premised on overspending, and now people like Krugman seriously think overspending by the government will stimulate consumers to overspend and the fruit will be a flourishing economy. Dare I say: blowing up a balloon-rabbit bigger and bigger never makes it a real rabbit. What’s missing in our economy is real value – hard assets instead of paper promises. We go on spending money we don’t have so we can possess things we don’t own, our government goes on spending money it doesn’t have so we can spend money we don’t have so we can possess things we don’t own – an admirable balloon, or it was before it started sagging. Thanks to Krugman for reminding Uncle Sam to puff again, with feeling.

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