Tuesday, November 12, 2013

Krugman Views Government Spending As A Goal

After having bashed Germany last week, Krugman now defends France, arguing that the fact that some advocates of deficit reduction criticize France for doing it through tax increases shows that their real goal is shrinking government spending, not deficits.

Krugman is certainly right that many people, including me, who advocate deficit reduction views lower government spending as a goal, for ideological and/or economic reasons. However, there's no conflict between viewing deficits as a problem and thinking that spending cuts are a better way of reducing them than tax increases, especially in a country like France, where government spending relative to GDP is the highest in the world, except for Denmark

Furthermore, Krugman reveals by his wording that he himself inserts ideological thinking in this, except he has the opposite ideology of viewing government spending as something good. While he normally attacks "austerity policies" fiercely, he describes the French tax increasing policies as being "fiscally responsible". Not exactly the words he use to describe spending cuts.....


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