The Crowbar

When will Keynesians learn that deficit spending always costs orders of magnitude more than spending reduction? Never, of course, because they live in an agenda-driven fantasy world where denial is the highest virtue.

As was inevitable with the Bush/Obama Administrations’ harebrained ”stimulus” bills, the US Federal Reserve has begun printing money, adding to the money supply – trying to ease credit. China, the largest holder of US reserves, is flipping out about it because it WILL induce inflation and China’s (and all reserve holders) currency holdings will lose significant value. With enough inflation nobody will want to buy US debt. The US is in real, actual danger of collapsing under the weight of it’s own debt.

Our stimulus and other deficit spending is deeply stupid and foolish, not to mention dangerous to our economy.

“Keynesian concerns” were not properly considered in the first stimulus debate, according to everyone’s favorite hard-left backwards-thinking economist Paul Krugman.

What wasn’t considered?

During the initial discussion of the stimulus, the debate was framed almost entirely as a debate between Obama and those who said the stimulus was too big; the voices of those saying it was too small were largely frozen out. And they still are…

Yes, Krugman is a member of the Keynesian School of Economic Magick With a ‘K.’ This school of thought believes that government spending is imbued with special pOWerZ to make consumers & producers suddenly realize, “Wow, if the government is spending gobs of money, then everything’s going to be A-OK.” Sadly, such economics only work in places like Pleasantville. In full-color reality, government spending only changes who gets to decide where the wealth is spent – and that would be the politicians, of course, who Always Know Better That You.

So then, here’s the kicker:

the voices calling for stronger stimulus are, may I say, sorta kinda respectable — several Nobelists in the bunch, plus a large fraction of the prominent economists who predicted the housing crash before it happened.

Having a Nobel prize doesn’t mean squat if you’re pushing asinine ideas.

< Pause briefly to consider Nobel prize winners Climate Change Preacher Al Gore and Terrorist Yasser Afarat. >

Also, it doesn’t take a “prominent economist” to know when a housing crash is coming – a rhudimentary understanding of economics can easily provide such a prediction. It was pretty obvious to me (not an economist) a housing crash was coming – the frantic pace of growth was unsustainable, especially combined with free-wheeling credit.

But somehow, the pro-stimulus people are unpersons. Who makes these decisions?

Who? Thankfully, not Waaah-Nobody-Listens-To-My-Bad-Ideas-But-They-Should-Because-I-Have-a-Nobel-Prize Krugman.