Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Fun on Friday: Silly Keynesians

  by    0   1

I saw a tweet this week by Paul Krugman asserting, “What we do have is a persistent problem of weak demand; yes, we have full employment now, but only with extremely low interest rates, which means little ability to respond to the next downturn. This makes a strong case for a big government investment program.”

Ah yes. It’s the Keynesian solution to every problem. Just spend more money!

Or break a window.

Oh, wait. Broken windows mean spending money. So nevermind, it’s always spending money.

Silly Keynesians and their silly Keynesian fiscal stimulus.

And it is silly. This is, after all, the guy who suggested a fake alien invasion would be good for the economy because it would boost government spending. Remember that? I’m not making this up. Krugman actually said this.

“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” he said. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better—“

I think he was going to say we would be better off. Ummm. Yeah. OK. I’m pretty sure building weapons to fight off fake aliens would make my life at least 36% better, especially if I was taxed for it.

But why not dispense with the theater? Why not just hire a bunch of people to dig random holes? It’s pretty much the same thing. In fact, I think there might be slightly more utility in random holes than weapons to fight non-existent aliens.

If you think I’m just being obtuse and Krugman might actually be onto something here, please, for the love of all that’s good and true, take a few minutes to read Bastiat’s explanation of the broken window fallacy.

Anyway, back to Krugman. I’m a little confused. He says we need a big government spending program. It’s hard to even fathom what Krugman is talking about. I mean, what exactly does he think we’ve got right now?

In FY2019, the federal government spent a staggering $4.45 trillion, according to CBO estimates. That was an 8% increase over FY2018. Both military and domestic spending increased. In other words, we saw a healthy expansion in both the warfare and welfare states. Despite increasing federal revenue, the national debt grew by $1.2 trillion in FY2019.  (If you’re wondering how the debt can grow by a larger number than the annual deficit, economist Mark Brandly explains here.)

But we still need a “big government investment program?” If $4.5 trillion isn’t enough government fiscal stimulus, how much is? Six trillion? Seven trillion? The federal government is already spending money like drunken sailors. (I mean no disrespect to drunken sailors. I’m pretty sure their money is better-spent than Uncle Sam’s.) The government would pass out from alcohol poisoning before it got drunk enough to spend the amount of money Krugman wants. We’re at peak silliness here.

Not to get too political, but I’ve noticed a pattern over the years. Republicans complain about Democrats spending money and then they get power and keep right on spending money. Meanwhile, Democrats claim the Republicans aren’t spending enough money and when they get into power, they spend more money.

Notice the common denominator — spending money.

We’re all silly Keynesians now!

Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the-wall and off-beat stories relating to precious metals and the economy, and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.

scam-2-sm

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Fun on Friday: Going for Olympic — Silver?

Have you been watching the Olympics? I’ve always loved the Olympic Games. There’s always so much drama as the best athletes in the world compete for gold. But did you know they are mostly competing for silver? True story. There is very little gold in an Olympic gold medal.

READ MORE →

Fun on Friday: With Friends Like This…

With friends like this, who needs enemies? Amanda Douglas, 27, stole gold and silver coins, along with other items from her friend’s home, including gold bars, 150 earrings, guns, ammunition, and a container holding a dog’s ashes. Yes. You read that correctly. Amanda stole her friend’s pet’s ashes. Nice girl.

READ MORE →

Fun on Friday: The Story of the Mormon Island Gold Rush

Falling lake levels due to drought in California have revealed the ruins of an old gold mining town. The story behind Mormon Island is pretty interesting. Early in March 1848, W. Sidney, S. Willis, and Wilford Hudson set off from their fort to hunt deer. When they stopped along the south fork of the American […]

READ MORE →

Fun on Friday: Raise That Silver Cup!

On Wednesday night, I got to watch a bunch of guys skate around an ice rink with a silver cup hoisted over their heads. My beloved Tampa Bay Lightning won their second straight Stanley Cup championship with a 1-0 win over the Montreal Canadians. If it seems like we just did this – well – […]

READ MORE →

Fun on Friday: Lost or Stolen?

“Officer, I need to report my wife. She lost her gold necklaces.” That’s basically what happened in Strongsville, Ohio, recently.

READ MORE →

About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
View all posts by

Comments are closed.

Call Now