continuing Krugman's column: > If Mr. Obama wins, he’ll presumably go back to pushing for modest stimulus, > aiming to convert the gradual recovery that seems to be under way into a more > rapid return to full employment.
> Republicans, however, are committed to an economic doctrine that has proved > false, indeed disastrous, in other countries. Nor are they likely to change > their views in the light of experience. After all, facts haven’t gotten in > the way of Republican orthodoxy on any other aspect of economic policy. The > party remains opposed to effective financial regulation despite the > catastrophe of 2008; it remains obsessed with the dangers of inflation > despite years of false alarms. So it’s not likely to give up its politically > convenient views about job creation. > And here’s the thing: if Mitt Romney wins the election, the G.O.P. will > surely consider its economic ideas vindicated. In other words, politically > good things may be about to happen to very bad ideas. And if that’s how it > plays out, the American people will pay the price. < My crystal ball is cloudier than PK's. From the first Presidential debate, it seemed that Obama had embraced BS (Bowles-Simpson), while Biden also seemed to be leaning toward balancing the federal government's budget (blaming 2007-09 on Dubya's deficits). On the other hand, Romney & Ryan could easily engage in covert Keynesian stimulus, the way that their colleagues Ronnie Raygun and Dubya did: cut taxes for the rich while increasing military spending, counteracting the negative effects of cuts to programs that benefit the majority of the US population. All else equal, even though it has little or (more likely) no stimulative effect on the supply side, cutting taxes for the rich does stimulate the economy's aggregate demand. Of course, it's a very inefficient way of doing so (compared to, say, cutting social security taxes or raising unemployment insurance benefits)* while it's quite inequitable, encouraging the growth of inequality in both income and wealth. That is, it flunks the orthodox economists' two Big Tests (efficiency and equity). * here, "efficiency" would be measured by fiscal stimulus per dollar of increased government deficit. By the way, in terms of demand-side effects, an increase in military spending is quite efficient in these terms. -- Jim Devine / If you're going to support the lesser of two evils, at the very least you should know the nature of that evil. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
