German finance minister Wolfgang Schauble left little question about his view of the wisdom of the economic policies of the Obama Administration. Schauble called the U.S. plan to pour trillions of dollars into the bailout fund “stupid” and said it would destroy the AAA ratings for the members — precisely what occurred to the U.S. this year. There is rising criticism of the economic views of Timothy Geithner, who some view as steering the U.S. into massive and unproductive spending.
It is rare to see such a public rebuke in diplomatic circles and highlights the lingering questions of the Administration’s policies of pumping huge amounts of money into the market and into jobs programs.
The Obama jobs plan has received little support on the Hill where critics are charging that the plan will cost $200,000 a job — an assertion defenders have called misleading. ABC News reported “Treasury Secretary Timothy Geithner didn’t dispute a Harvard economist’s estimate that each job in the White House’s jobs plan would cost $200,000, but said the pricetag is the wrong way to measure the bill’s worth.”
I tend to be a bit skeptical of the government being able to prime the pump with huge bailouts and stimulus handouts. Similarly, the last stimulus fund created for shovel-ready projects appears to have been largely a failure from a cost-benefit perspective. That perspective is not helped with President Obama now saying that there is “no such thing” as shovel-ready jobs after using the pitch to sell the last massive fund.
What do you think?
Source: Telegraph
Gyges,
Correcting misconceptions about economic realities was always more important to me than correcting any misconceptions about myself.
You are absolutely right that krugman has stated infrastructure spending was better than military spending. He’s said this many times over. The distinction I have never heard him make though, is that WHO is spending is just as important as what they spend it on. And even though he has made the claim that some government spending is better than other kinds, to him and the vast majority of keynesians, all production, public and private, is literally a homogenous blob of output, and spending in and of itself is good and it does not matter what is produced or where you throw money as long as you keep doing it. To keynesians, production may as well be a homogenous blob of output, or just a numerical value assigned to a variable. They have no concept of opportunity cost, or the law of scarcity, and wish with all their might to abolish Say’s law that production must precede consumtption.
As for his views on ww2 and the fake alien invasion, I have not added any context that he didnt wish to be associated with his statement. In the video, when he is asked the question, he and he alone brings up ww2 as a contextual framework for the rest of his statements about mobilizing a defence to fend off a non-existent threat being able to save us from economic collapse. Krugman chose to frame his argument in that perspective, not ayone else.
Your assumption about the ww2-new deal depression topic, its a common mistake i see many people make because to most of them, those were the only options ever presented. If its not answer A then it must be B because they have no idea there is an answer C or D. Its kind of the same thing like when i say the plan to bailout broke ass european countries with american taxpayers dollars, that someone automatically concludes Im republican, because if im for the plan I must be a democrat and if Im opposed well then i must be republican.
Ekerya,
Yeah, the whole “She” thing never really sat well with me, and since I couldn’t remember WHY I used it, I thought I should ask. Apologies for the mistake, I don’t like having made assumptions about you.
I think you may be confusing Krugman the popularizer (as in what Sagan did) with Krugman the economist. I bet given unlimited space and time, Krugman would have mentioned that the money spent building bombs would have been much better spent (for a long term point of view) on infrastructure. I don’t really have time to look it up (unless you really want me to, but it’ll be awhile), but I’m sure I’ve read that from him. As for the Alien thing, same idea. Nuanced views don’t come across well on that type of format.
Also, it looks like your right about mises.org’s view on WWII. I’ve been wrong before, and will probably be wrong again.
http://www.bloomberg.com/news/2011-09-28/germany-votes-on-euro-rescue-fund-to-set-stage-for-more-anti-crisis-steps.html
German Parliament approves the rescue plan.
As for economic recovery through green energy propped up by massive government subsidies, the only conclusion i can come to is that you have short term memory loss, possibly due to being concussed. No matter which side of the war party you choose to blame, I have seen plenty of evidence that solyndra extended into the bush administration, solyndra stands as a stark example of why people making economic decisions completely insulated from the consequences of those decisions and with other people’s money will lead to failure every single time.