Appearing over the weekend on Fareed Zakaria’s CNN show, New York Times columnist Paul Krugman returned from his career of spreading scurrilous lies in the wake of the Tucson shootings, and resumed his normal duties as a hilariously incompetent “economist.” He unloaded this gem about the economic benefits of an alien attack on the Earth:
In essence, during a friendly chat between Keynesian airheads wishing they could seize more trillions of taxpayer money to plow into “infrastructure,” Krugman blurted out that it would be awesome if the government announced that aliens were en route to wipe out humanity, because it would eliminate public resistance to all that lovely infrastructure spending. A few more trillion poured into the Obama black hole would turn our economy around in just 18 months, if only those stupid redneck teabaggers thought their lives depended on cranking up the national debt!
This is not the first time Krugman has extolled the economic virtues of destruction. On an earlier edition of Zakaria’s show, he wistfully portrayed World War II as a giant economic stimulus plan. If he’s tempted to view an alien invasion the same way, I would point out that a victorious Earth wouldn’t become rich because the ravages of war leave it as the primary industrial power in the galaxy. In order to view postwar America as benevolently “stimulated,” you have to ignore postwar Europe and Asia.
If you’re tempted to dismiss this as foolishness that nobody in their right minds would pay attention to, note that Zakaria himself thinks Keynesian economics boils down to “employing people to dig a ditch and then fill it up again,” because they’d be “productively employed” and pay taxes. Krugman thinking is the guiding philosophy of the current Administration. That’s why we’ve got double-digit real unemployment, and your kids will be receiving an invoice for several trillion dollars of “stimulus” and “infrastructure” spending.
Here’s Joe Weisenthal of Business Insider joining Krugman in the kiddie pool:
The primary facing the economy is damaged private sector balance sheets. Due to the collapse of the housing bubble, people are still too deep in debt, and it’s this high debt service/desire to pay down debt that’s sapping cash from other areas (spending, investment, etc.).
If this fear of an alien invasion prompted the government to spend, say, $1 trillion on telescopes and lasers, then if nothing else, that would be $1 trillion more in private sector income, and thus $1 trillion spent towards private balance sheet repair. There’s no exception to this. If the government spends money it becomes desperately needed private sector income.
Now unfortunately you’re left with $1 trillion in lasers and telescopes that were never needed, so obviously that’s a tragic waste.
It would be much better if that $1 trillion were spent fixing clogged airports, heavily used bridges, and aging train stations. Then you’d get the $1 trillion in balance sheet repair AND you’d wind up with usable assets afterwords. But that would take political will that we don’t have. That kind of political will only arises at a time of extreme existential crisis, like an alien invasion threatening all mankind.
Hey, you know what would be even better? If the people who earned that damned trillion dollars got to spend it on whatever they want. “If the government spends money it becomes desperately needed private sector income?” What the hell do you think it was before the government seized it by force, Mr. Weisenthal? And after years of Obama disaster, do you still imagine that it returns to the private sector intact when the government does its suck-and-blow routine?
Krugman and those foolish enough to take him seriously are falling prey to one of the oldest fallacies in economics, the “Broken Windows Fallacy” noted by Frederic Bastiat. Breaking a window appears to set off a whirlwind of economic activity, as a new window is created and installed… but you can only view this as a net gain if you discount the value of the original window, and the opportunity cost of spending money replacing it, instead of allowing the window’s owner to spend the money on other pursuits.
In the end, this is no different than the brilliant thinking behind declaring unemployment insurance or food stamps to be marvelous forms of economic stimulus, as members of the Obama Administration have been doing lately. It is the half-witted foolishness of people who understand only half of economics – the part that involves piles of money changing hands, the part they can most easily control and tax. Leave them in charge, and we’ll be lucky to lose only half of our national wealth.