Monday, November 19, 2012

Paul Krugman Missing 48 Hours With No Trace

We here at The Silicon Graybeard have an exclusive story to report.  We have been informed Paul Krugman, Nobel Prize winner in Economics and Opinion Page writer for the New York Times went missing for almost 48 hours.  He was first reported missing Saturday, after submitting an editorial to the times calling for the return of the 91% tax bracket, implying that the extreme rate was responsible for the prosperity of the 1950s and early 1960s. 

NYPD investigators located Dr. Krugman, who somehow became trapped in a large brown paper grocery bag in his apartment and was unable to analyze a way out of the bag.  Authorities suggest that a few more hours of being unable to think his way out of a paper bag would have proven fatal to Krugman, 59. 

Over the top?  I don't think so.  Krugman is the poster child for more Keynesian spending and completely opposite my way of thinking, but this one ought to be about as hard as finding your way out of a paper bag.  The US was preeminent in the post WWII years despite those tax rates, not because of them.  The reason we had sustained economic growth is that Japan and Europe had been bombed back to the stone age and not only couldn't compete with us, they depended on our factories producing the goods to keep them alive and restore their infrastructure.  The rest of the world (rural China, the rest of Asia, South America and Africa) were either heavily damaged by WWII or didn't have enough infrastructure to compete with us.  The US grew to superpower size and status because we didn't fight any of WWII on the mainland, and precious little on "home turf" at all!  If we had a 91% top rate in today's competitive world, we'd be collapsed and gone in within a year.  Perhaps that's his goal. 

Obviously Krugman has never seen this graph which shows that since 1980, as the tax bracket on the richest 1% has gone down, the larger the share of the national tax burden they've paid.  It's not like this is secret information, though. 
Nor has he seen Hauser's work, which demonstrates that tax revenue - as a percent of GDP - remains remarkably constant regardless of tax rates.  This data goes back to the 1950s and shows the 91% rate he pines for.  The revenue was the same; all that the high rate did was punish those people who were paying it and keep GDP from growing. 

But it turns out Krugman isn't the only big name idiot out and about today.  Turbo Timmy Geithner says we should eliminate debt ceilings.  It seems Timmy, bless his pointy little ears, is not real good on hard data and facts.  Fact is we have never not raised the debt ceiling, so he already has his way.  Then he comes up with this knee slapper:
"We've had 100 years of experience with it, and I think only once--last summer--did people decide to use it to threaten default on the American credit for the first time in history as a tool for political advantage"
As I said at the time, not raising the debt ceiling is not default, it simply means we can't borrow more money.  Default means not paying the interest on the debt and we were never at risk of that. 
And quoting John Lott from that July '11 post:
Time after time, congress and the president have failed to agree on a debt ceiling increase and still there has been no default. Examples include: December 1973, March 1979, November 1983, December 1985, August 1987, November 1995, December 1995 to January 1996, and September 2007.
I gotta tell you, I'm not used to this much prime idiocy in one day's headlines.  It sure has been a bumper crop of bull crap this year!


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