Krugman Can't Admit He Was Wrong on Austerity: Lat

[FreedomFan]

these PHD Econs' that never worked in a real JOB ?

You act like stealing wealth from the middle class isn't hard work.

 

[Larry Gude]

You act like stealing wealth from the middle class isn't hard work.

It's a whole lot easier when we just hand it over so readily.

 

[SamSpade]

Also don't forget this is ALL PhD economists coming out of MIT, UChicago, etc. know. This is the prevailing philosophy.

Thank god my daughter is at George Mason studying economics under proper Austrian tutelage.

All of the economics majors I ever knew are in IT now. Several are quite brilliant, including a former boss who had been in a PhD program but quit in exasperation. She's probably the most brilliant IT person I know, but she felt that economics wasn't really science - too much of it was guesswork. She would often make mention of this law or that, but admit - no one really knows why it happens.

Admittedly, I take a dim view of economics experts - they can craft superb models and talk math that even I can't understand - but it doesn't produce results. I could never be a scientist - even as a programmer, I take an engineer's perspective. I don't care what the science says, what matters is what can be done in the real world.

 

[FreedomFan]

All of the economics majors I ever knew are in IT now. Several are quite brilliant, including a former boss who had been in a PhD program but quit in exasperation. She's probably the most brilliant IT person I know, but she felt that economics wasn't really science - too much of it was guesswork. She would often make mention of this law or that, but admit - no one really knows why it happens.

Admittedly, I take a dim view of economics experts - they can craft superb models and talk math that even I can't understand - but it doesn't produce results. I could never be a scientist - even as a programmer, I take an engineer's perspective. I don't care what the science says, what matters is what can be done in the real world.

Actually you sound like you'd be a perfect Austrian, then. Throw out the models, stats, "trends", leading/lagging indicators, etc., and observe and predict human behavior based on inputs and stimuli. That's about it in a nutshell. Behavioral economics is also a major part of it.

https://en.wikipedia.org/wiki/Praxeology

 

[FreedomFan]

All of the economics majors I ever knew are in IT now.

Also funny you should mention that. I was an econ major turned programmer turned IT consulting services firm owner until I sold my company and retired almost 2 years ago.

 

[struggler44]

It's a whole lot easier when we just hand it over so readily.

Everyday my friend, everyday...

 

[BOP]

Austerity does not work. End of discussion.

Just when I think you've said the stupidest thing ever, there you go again.

 

[daileyck1]

Just when I think you've said the stupidest thing ever, there you go again.

I'll take that as a compliment coming from an intellectual giant such as yourself.

 

[Tilted]

Austerity does not work. End of discussion.

That kind of depends on what we mean by 'work' - i.e. what the goal happens to be - doesn't it?

But, yes, deficit spending (whether it be on the part of households, industry, or governments) represents a boost to economic activity in the short term - it provides economic stimulus. Reducing deficit spending represents, in relative terms, short-term economic drag. That's axiomatic. The questions are: (1) how efficient is given deficit spending in such regards; (2) how will it impact economic activity in the long term; (3) how are long-term and short-term concerns weighed relative to each other; and (4) based largely on the first three considerations, how wise is the given deficit spending?

Whether or not austerity works depends in large part on what the goal is, which itself amounts in large part to what the time horizon is.

We should make no mistake, credit (which, in certain contexts, means deficit spending) has been one of the main drivers of the economic growth and societal prosperity we've seen in recent centuries. Indeed, it has facilitated and accelerated some of the other drivers of that prosperity (e.g. invention / technology in general). The earlier discovery / invention / utilization of credit by some cultures allowed them to advance more quickly than those who came to use it only later (or never, or in more limited ways), and it's a big part of why the former were able to conquer and subordinate the latter, often with ease. Credit / deficit spending is a powerful tool, it can be of great benefit in specific and in general.

But as with so many things, the question is how much is too much? How much of a good thing makes it a bad thing? At what level, or under what circumstances, does the use of credit swing from net beneficial to net detrimental? The answer to that question, it seems apparent to me and to many, is something other than never. That being the case, we believe austerity does - in response to some circumstances and conditions - 'work'. That is to say, it is called for. It is wise. It is the right response.

And since I'm rather Jeffersonian in my core belief as regards the morality of one generation passing on its collective (i.e. sovereign) debts to another, I myself need not even weigh the big picture efficiencies of given (sovereign) deficit spending too carefully. If it is at a level, or takes us to a level, where we can not reasonably expect that we can pay it off within a generation, then it is not proper. Therefore austerity is called for.