Since the early days of the Obama Administration, economist Paul Krugman has been more than eager to defend every spending measure enacted by the Democrats newly in office.
Writing in August of last year, Krugman credited “big government” with saving the country from a Second Great Depression. While George W. Bush was in power, the economist used to complain about government spending running amok but after Obama moved into the White House, budget deficits were “actually a good thing.”
At the start of the Bush Administration Krugman argued in favor of lowering the interest rate in order to “promote spending on housing.” He even proposed a fiscal stimulus package that “should include only measures that really will promote spending,” he noted. “Giving money to lower-income families would also be sensible.”
Krugman might see things differently but President Bush followed his advice. The interest rate was lowered while the government-sponsored enterprises affectively known as Fannie Mae and Freddie Mac facilitated an irrational lending policy that ultimately undermined the whole of the American financial sector to bring about the meltdown of 2008. Banks are blamed but it was government that made the recession.
The answer, predictably, was: more government. At a time when the United States had already to finance two wars in the Middle East, both Democrats and Republicans approved of bailing out not only banks but much of the auto industry as well. Although journalists predicted that banks would mostly abuse the infamous Troubled Asset Relief Program (TARP) and although even Congress found (PDF) that it had in no way stimulated America’s ailing housing market, Krugman relishes in the “deliberate efforts of the government to pump up the economy.” Indeed, just a few months ago, he declared that the world “would be better off if governments were willing to run even larger deficits over the next year or two.”
This week, the High Priest of Keynesianism reiterated that sentiment, complaining that the stimulus was “too small”. He in part turned his back on his own party, claiming that the Obama Administration was “wrong” to think that more spending wasn’t “necessary.”
Still, at least the Democrats favor spending before anything else, right? “And aren’t you glad that right now the government is being run by people who don’t hate government?” Even though they are saddling up the American people with debts that their unborn great-grandchildren might, if lucky, be able to pay off. But who really cares about the future? As the grand master himself once professed, “In the long run we are all dead.”