Tuesday, May 22, 2012

Spending and Growth and profound intellectual dishonesty...

From Nobel laureate (Economics) Paul Krugman:
So Japan, which is spending heavily for post-tsunami reconstruction, is growing quite fast, while Italy, which is imposing austerity measures, is shrinking almost equally fast.

There seems to be some kind of lesson here about macroeconomics, but I can’t quite put my finger on it …
Krugman, who believes that the problem with the Obama stimulus was that it was too small, is now going to argue an economic proposition (the broken-window fallacy) that was debunked by Bastiat over 150 years ago?

Wow. Just wow.

So, Professor Krugman, do you want to make the argument that Japan is wealthier today than it was before that tsunami hit? And, if not, then the cost of that temporary growth probably exceeds the benefit, huh?

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