Thursday, May 16, 2013

Austerity Reduces Deficit-Proves Calls For Austerity Was Unfounded?

Paul Krugman has really outdone himself this time, arguing that a big reduction in the U.S. federal budget deficit proves that calls for "austerity" measures were unfounded.

But this drop in the deficit comes after austerity measures have been implemented! Remember, the so-called "fiscal cliff" that Keynesians said would trigger a deep slump if implemented. Well, most of the tax increases in the "fiscal cliff" have now been implemented, and the spending cuts of the so-called "sequester" were implemented entirely, though with a two month delay.

Krugman's reasoning is like a fat guy who is forced to go on a diet, loses 10 kilos/22 pounds in weight, and then points to the weight drop to argue that the diet wasn't necessary to lose weight.


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