Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
David Stockman has come out with a new book....and a scathing editorial in NY Times... He argues that the economy has been distorted by the Fed's "crony capitalism" which is benefiting Wall Street with the blessing of the Politicos while the rest of the nation pretty much twists in the winds.
It argues that it takes a huge techological breakthru and/or war to "break out" from the path of extreme slow growth that is created by the Keynesian policy of the past 80 years.
In response, Paul Krugman has literally went slobbering bonkers in criticism of Stockman. Simply calling Stockman a "Cranky Old Man" ... in reality, Krugman has no defensible argument against Stockman's claim. Krugman's answer, of course, is to raise taxes until revenue and spending levelize. But raising taxes tends to pull the economy back...so the real question is does raising taxes rise to pay the expenses? Or does raising taxes only reduce the amount spent by the private economy until it balances? If the latter, then the average person will live a less prosperous life through lower income, if the former the average person will live a less prosperous life through high costs (taxes, both direct and passed thru on items they do buy.) It's a choice, howbeit a poor one.
The fact Krugman does not like Stockman's take on the issue, only leads me to believe Stockman is correct. Krugman has long argued that SPENDING gets you out of a recession and has argued we have not spent enough.
It argues that it takes a huge techological breakthru and/or war to "break out" from the path of extreme slow growth that is created by the Keynesian policy of the past 80 years.
In response, Paul Krugman has literally went slobbering bonkers in criticism of Stockman. Simply calling Stockman a "Cranky Old Man" ... in reality, Krugman has no defensible argument against Stockman's claim. Krugman's answer, of course, is to raise taxes until revenue and spending levelize. But raising taxes tends to pull the economy back...so the real question is does raising taxes rise to pay the expenses? Or does raising taxes only reduce the amount spent by the private economy until it balances? If the latter, then the average person will live a less prosperous life through lower income, if the former the average person will live a less prosperous life through high costs (taxes, both direct and passed thru on items they do buy.) It's a choice, howbeit a poor one.
The fact Krugman does not like Stockman's take on the issue, only leads me to believe Stockman is correct. Krugman has long argued that SPENDING gets you out of a recession and has argued we have not spent enough.
