Paul Krugman Very Unhappy With Debt Deal…Good!

Paul Krugman, one of the Nobel Laureate’s* of the Old Gray Lady, ( Fishwrap), has decried the debt ceiling deal. He is already making predictions of gloom and doom. Here’s a snippet of his latest screed;

A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

* When you get hired by the NY Times, it seems a Nobel prize comes with the job.

Steven Hayward opines on the deal from the English Channel somewhere. He says, and I agree, that any deal that is unsatisfactory to Paul Krugman is a good thing;

Sitting offshore from the Guernsey Islands this morning and staring over at France is hardly likely to lead to illumination about where the debt ceiling drama stands at this moment, but like much of what comes out of Washington I have to wonder whether the axis of convenience between politicians and the major media that usually has everything wrong is just as wrong on this subject as well; namely, the view that a debt ceiling deal along the lines currently being discussed will avoid a downgrade for U.S. sovereign debt.  I think just the opposite is likely.


The Tea Party is right to grumble, but it is also true that they have scored some heavy blows already in American politics merely by electing a strong faction in just one house of Congress, and holding the GOP leadership’s feet to the fire.  Over the last six months Obama had to retreat from a no-strings-attached debt ceiling increase and a big spending budget, to calling for a “balanced approach” that was code for more taxes, to agreeing to a short-term deal with no tax increases in which the balance of the discussion is on spending cuts.  And besides, the deal has upset Paul Krugman, and any deal that does that has to have a little something going for it.  Note also that the Wall Street Journal editorial page likes the deal, and they don’t often give the GOP a hall pass on budget deals.But yes, the score at halftime is a tie, at best, and losing is not an option.  We’ve made the quarterback scramble, but we haven’t sacked him for a loss yet.

We haven’t sacked him yet, but he’s looking for a good place to lay down for the least loss of prestige possible.

Via Memeorandum

Update; Smitty over at TOM has some advise for Mr. Krugman;

Sitting There Feeling Useless sits Paul Krugman, unable to grasp that the American people aren’t buying his swill.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further.

Can you not grasp reality, man? Government Spending Triggers Fiscal Undertows.
Only somebody with the mentality of an insect would lack the wisdom to see that, beyond a certain early point (long ago passed in our case) the governmental cast on the economic limb with the fracture* causes atrophy of the market muscles. Human beings that do not confuse themselves with Socialist ants can grasp that an exoskeleton on the limb implies increasing weakness over time, not recovery. Load-shed the government spending, the over-regulation, the suffocating growth of bureaucracy, and go for some good, old-fashioned physical therapy.
Sincerely, Thanks For Understanding.

Update II; Via Instapundit, Nick Gillsepie of Reason wonders;

Me? I’m just hoping whatever Krugman is smoking is covered under Obamacare. As Sen. Rand Paul (R-Ky.) points out in an excellent retort to the deal in the works, this “compromise” adds at least $7 trillion to the national debt over the next decade (because it claims to cut up to $2.5 trillion from a baseline that assumes $10 billion in added debt; whoopee).


3 thoughts on “Paul Krugman Very Unhappy With Debt Deal…Good!

  1. Pingback: Krugman, STFU! : The Other McCain

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