Monday, August 24, 2009

But I thought this Krugman fellow was an economist..?

Paul Krugman, who has spent much of his last few columns demanding that the president and his party ignore the will of the majority and impose health care reform by fiat, makes an interesting point about the "public option":

Mr. [Ben] Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.

Of course, every person on the government plan is one more person to be supported by taxpayers. It makes the collapse of private insurance (especially if the government is using taxpayer cash to create a "gold-plated" plan) that much more likely, pushing even more people onto a public plan. And that precludes companies who find it cheaper to pay a health care "tax" than actually provide healthcare.

Can our system absorb that? Well, let's see where we are under Obamanomics (a subsidiary of Krugmanomics) before we socialize medicine:

In news leaked late Friday to the Reuters news agency, the White House conceded that the national debt will increase by $9 trillion over the next ten years, nearly doubling a national debt that now stands at $11.67 trillion.

Since the beginning of the republic in the late 18th century, the U.S. government has accumulated a total of $11.67 trillion in debt. In the next decade, under the budget plans the Obama administration has in mind, that debt will almost double to about $20.67 trillion.

Until this year, according to historical budget tables published by the White House Office of Management and Budget, the largest annual budget deficit the U.S. government ever ran was in fiscal 2008, when the deficit was $458.5 billion. The average deficits the Obama administration is now planning to run in each of the next ten years will now almost double that.

Charles Krauthammer - not a Nobel Prize-winning economist - talks about the effect this will have on our economy, and the effect it should have on Obama's health care "reform":

This is a huge increase in the deficit. And if you think of it, this is an estimate over a decade, which means that the annual [deficit] will be nearly $1 trillion. It will be $900 million every year for ten years, which is unsustainable.

It will destroy the dollar. The only way that kind of debt is paid off is not in taxes. It is in inflation. And everyone will see it coming. It will raise interest rates.

This is a crisis in and of itself. And one of the reasons health care is in trouble — there are a lot of reasons — but one of them is Americans understand that when you are looking at [health-care] deficits which are...adding $1 trillion or $1.6 trillion, as the CBO has estimated in the Senate plan, adding that onto it gratuitously is insane.

Insane, indeed. So where does that place Krugman, a man who is screaming that we must have that additional trillion-plus deficit now, even if it tears the nation asunder? What does this say for Krugman's economic credentials when writes pieces that says that the more people on public health care, the better, and refuses to even bring up the topic of the enormous financial burden it will place upon the nation?

Well, let's say this: I would sooner ask Nobel medalist Yassar Arafat (may he rot in hell) for his guidance on Arab-Israeli relations than ask Krugman for his advice on matters economic.

For the man is - to paraphrase Dr. K - gratuitously insane.


Anonymous said...

How Krugman won a Nobel prize completely blows my mind. At every turn, his take on the economy is as wrong as you could possibly get. Econ 101 concepts like inflation, free market, monopoly.. they totally escape him. It's insane that he continues to be employed by the NYT.. not surprising, but still insane.

black said...

I think his approval ratings have gone down because he promised us change, and all we got is change...(coins-leftovers). Terrible!!! Now, that’s all we are left with..some pocket change.