Must-Read: Stan Collender: Paul Krugman Is Wrong
Must-Read: I remember back in 1993 Alan Blinder saying at Clinton administration meetings that it was very important to look at the government’s capital account as a whole–that if we did not work hard to educate people to know that cutting government capital spending was not a net debt-reducing measure in any real sense, we would someday be sorry.
He was right. We didn’t. We are.
Sorry, Alan:
: Paul Krugman Is Wrong: “Krugman doesn’t get to the real problem…
…it’s not that the scolds and naysayers don’t understand the economics of government borrowing, it’s that the facts don’t matter to them. In today’s political environment, channeling Alexander Hamilton by explaining the financial realities of borrowing won’t convince many people that it’s not the Greece-like catastrophe-waiting-to-happen they continually say it soon will be. That’s why it hasn’t made any difference that the promised, right-around-the-corner federal debt-induced economic disaster hasn’t occurred…. It’s also why the scare tactics about leaving future generations with a worse economic situation has only ever dealt with half the balance sheet… [and] ignored the benefits the borrowing makes possible and the better, longer, more productive and safer life created for our children and grandchildren by, for example, advances in medical research, infrastructure, education and defense…