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Krugman and deficits

So, what people like me have been calling for is a temporarily relaxed attitude toward deficits as long as the economy remains depressed and monetary policy is up against the zero lower bound. What does that have to do with the 1970s?
2013 0227krug 2Well, here’s a chart on the ratio of debt to gross domestic product. So, as you can see, during the 1970s the United States had deficit spending that ran up the national debt, until Ronald Reagan was elected in 1980 and restored fiscal soundness. Oh, wait: it’s actually the opposite.
The truth is that whatever you might say about economic policy in the 1970s, it had nothing to do with Keynesian fiscal policy — and it did not involve increasing debt. People on the right tend to use “Keynesian” to mean “liberal stuff I don’t like,” but aside from that definition, the 1970s tell us nothing about the issues we’re discussing right now.

John Boehner Lists Our Presidential Thieves–And Ronald Reagan Is Among Them!

“The revenue issue is now closed,” Mr. Boehner said Thursday, before the House left town for the weekend without acting on the cuts and a Senate attempt to avert them died. Mr. Boehner said the dispute with Democrats amounted to a question of “how much more money do we want to steal from the American people to fund more government.”

“I’m for no more,” he said.

Boehner Halts Talks on Cuts, and House G.O.P. Cheers, Ashley Parker, New York Times, today

So Ronald Reagan was a thief.  Who knew?  

And so, it’s now clear, was every president beginning with Abraham Lincoln. Until George W. Bush, that is.  Teddy Roosevelt? Yup. Calvin Coolidge? Uh-huh. Harry Truman? I guess that’s what they meant by “hell” that he was giving ’em. They each stole from the American people via income taxes to fund the federal government. 

But since FDR was the one who initiated the stealing to pay for such specifics as Social Security, the Tennessee Valley Authority and other New Deal programs, we’ll start with him.  He also stole–a lot–from American people to pay for WWII.  

Dwight Eisenhower, JFK, LBJ, Richard Nixon, Gerald Ford, and Jimmy Carter perpetuated this theft. Big time.  Of course, Nixon, who assured the country that he was not a crook, did turn out to be one after all, so in retrospect, his theft from the American people was just in character.  And we knew all along that Dwight Eisenhower was the perpetrator of the theft from Americans that established a Soviet-style interstate highway system–or so Florida Rep. John Mica, the last Congress’s chairman of the House Transportation Committee, would describe the socialist ownership of the interstate highways. (That is the way he described Amtrak. And he wasn’t talking about its slowness and disrepair.)*

That controversial statue of Eisenhower that’s planned for D.C. should be scratched, not because of its design, which his ancestors dislike, but because of his criminality.

LBJ, of course, stole a lot of money from American people in order to fund the Vietnam War, a theft that this country did pay a very high price for, although not in a lengthy prison sentence after indictment and conviction for grand larceny.  But if that weren’t bad enough–from a criminal-law standpoint, that is–he also stole lots of money to fund the student-loan program that helped so many baby boomers go to college and graduate school.  Some of them–the ones who became hedge fund managers, anyway–would now be in imminent danger of becoming crime victims themselves, rather than the beneficiaries of thefts past, but John  Boehner has infiltrated the den of thieves and had has called the FBI, which, luckily, still has some agents working full-time schedules, despite the sequester.

And we won’t even get into George H.W. Bush, who, as we all know, lost his reelection bid to Bill Clinton partly because he had firmly and repeatedly promised during his first campaign to not steal more from the American people than was already being stolen, only to turn around and rob the American people blind. Luckily, he son was available eight years later to provide restitution, although his Department of Justice never did indict his father.  

And, speaking of Bill Clinton–well, they didn’t call him Slick Willie for nothing, did they?

But Reagan? Reagan?  Et tu?  Yup. I keep forgetting that tax rates were much higher during Reagan’s time as president then they are now, and that after lowering tax rates, he raised some.  He’s dead now, so he can’t be indicted.  And anyway, I think the statute of limitations has run. Which is too bad.

But Bill Clinton is very much alive, and active.  And since Obama seems unwilling to rebut Boehner’s and other Republicans’ intended inferential misrepresentation that Obama’s and the congressional Democrats’ tax-increase proposals, now and the ones enacted as part of the “fiscal cliff” resolution in early January, would tax Americans other than Americans who are quite wealthy, or who have income from capital gains or dividends and who still pay taxes for that income at lower rates than during the Reagan or the Clinton era, or who are corporate Americans.  

The Republicans expect that they will get a majority of Americans to believe falsely that the Dems are proposing to raise their taxes.  If Obama remains mute instead of correcting this misrepresentation, Clinton should step in and do that.  He should hang the taxes-as-stealing statement around John Boehner’s neck, and then tighten the noose by answering the question Boehner posed: How much more money do we want to steal from the American people to fund more government?  He then should answer the questions, from which American people, and for what? And he should be specific.

But he also should ask this: Since when is it theft of Americans to institute tax increases that a majority of Americans who voted in the recent election actually specifically voted for? And he should point out that what Boehner really thinks the crime is is that public prefers that the federal government continue to fund Medicare and other social safety-net programs, as well as myriad other services, agencies and perks of being an American; the National Institutes of Health, the National Parks Service, FEMA, and the EPA come quickly to mind, but of course there are many others.

As criminality goes, the aggressive attempts to undermine the very nature of democratic government, through an unremitting series of stunts and use of bizarre language and concerted campaigns of disinformation, strike me as more serious ones than the theft of wealthy Americans through tax increases that would remain substantially lower than they were during most of the 20th Century.  

But, by all means, Speaker Boehner, bring on the theft language, again and again.  Keep it up, all the way through the 2014 midterm elections. Please. But if you don’t feel like it, hopefully the Dem congressional candidates will pick up the slack and help you out with that, in their TV and Internet commercials.  

It should help them steal some elections.

*Parenthetical added after initial posting.

  • coberly says:


    of course you are right. but you don’t go far enough.

    as that brilliant writer, saint, sage, philosopher, and of course novelist, Ayn Rand, pointed out.

    Money is time, and time is life so taxes is not only theft, it is Murder. Murder most foul.

    Clearly we need to End Taxes Now!

    After all, do Lions and Tigers and Bears pay taxes?

    No. and you sheep have just got to accept that you were created to be food for the First Raters among us.

  • mmcosker says:

    What gets lost here by Republicans is that the government must spend first (and more) for there to be money in the economy to generate higher tax revenue at the state and Federal level. Deficits put more money supply into the overall bucket – the money to pay taxes comes from government spending.

    Now, I have come to conclude that we simply do not have a budget problem. I feel that we should lower taxes, even across the board, in exchange for higher deficit spending (needs to be about $1.5 trillion for a few years) and higher minimum wage. Seems counter intuitive for many, but that combination of things will actually lead to higher tax revenues. Note that our budget deficit has been shrinking despite maintaining the Bush cuts and stimulus spending through the end of 2012). Now the deficit is shrinking and the economy is starting to as well.

    I always thought that maintaining the Bush cuts was enough to get the Republicans to bite on maintaining the needed higher spending, and why I wished Obama had campaigned to just leave the cuts there in exchange for maintaining all the spending – and not cutting SS etc.

    While the Republicans are totally ignorant to the economics, where I take issue with the Democrats is their necessary focus on tax increases in the name of deficit reduction. This tactic forced a party in favor of tax cuts to say well if you want higher taxes we want lower spending too. This is one factor that fed the grand, and stupid bargain we now have.

    In the end, I blame both parties for playing a bad game of political chicken

  • mmcosker says:

    I meant UNnecessary focus on taxes.

  • The problems and difficulties for people and the economy that spending cuts will cause have been explained and discussed over and over. I have yet to see a reasonable explanation of the difficulties that the deficit and/or debt is currently causing us. Why are we even concerned with it?

  • The Reagan legacy is the biggest myth in D.C.’s history. Every defense of something that went wrong during his tenure (increased spending, debt, etc.) is based on Tip O’Neil and Dems going back on their agreement with Reagan to trim spending in return for increasing taxes. First, Congress was split for the six of Reagan’s years, with the Dems not taking both houses until 1987. Second, does the following suggest that Congress forced Reagan’s hand in spending (left-hand column is what Reagan requested, right-hand is what Congress authorized):

    Requested Authorized
    541,827,828 544,457,424
    507,740,133 514,832,375
    542,956,052 551,620,505
    576,343,259 559,151,836
    588,698,504 583,446,885
    590,345,199 577,279,102
    618,268,049 614,526,518
    621,250,664 625,967,373

    And this is the net:


    Third, any grand compromise between RR and TO regarding Social Security was forced, because the SST was in crisis. (of course this led to the hike in the payroll tax, and those surpluses generated from that tax hike were used to:

    a) save and invest in future retirements

    b) buy a baseball team

    c) pay down the government debt in order to calm the fears of the investor class.

    But yeah, RR was all about reducing taxes, trimming spending, and not screwing over the american people (those who rely on SS).

  • ilsm says:

    Taxes get in the way of the plutocrats’ accumulation and slow the 15’s destroying liberty and equality.

    Boehner, the plutocrats lap dog, talking about stealing from the American people.