Paul Krugman: On Economic Arrogance
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On Economic Arrogance, by Paul Krugman, NY Times: According to press reports, the Trump administration is basing its budget projections on the assumption that the U.S. economy will grow very rapidly over the next decade — in fact, almost twice as fast as independent institutions like the Congressional Budget Office and the Federal Reserve expect. There is, as far as we can tell, no serious analysis behind this optimism; instead, the number was plugged in to make the fiscal outlook appear better.
I guess this was only to be expected from a man who keeps insisting that crime, which is actually near record lows, is at a record high, that millions of illegal ballots were responsible for his popular vote loss, and so on: In Trumpworld, numbers are what you want them to be, and anything else is fake news. ...
The only way we could have a growth miracle now would be a huge takeoff in productivity... This could, of course, happen: maybe driverless flying cars will arrive en masse. But it's hardly something one should assume for a baseline projection.
And it's certainly not something one should count on as a result of conservative economic policies. ...
The ... belief that tax cuts and deregulation will reliably produce awesome growth isn't unique to the Trump-Putin administration. We heard the same thing from Jeb Bush (who?); we hear it from congressional Republicans like Paul Ryan. The question is why. After all, there is nothing — nothing at all — in the historical record to justify this arrogance. ...
The evidence ... is totally at odds with claims that tax-cutting and deregulation are economic wonder drugs. So why does a whole political party continue to insist that they are the answer to all problems?
It would be nice to pretend that we're still having a serious, honest discussion here, but we aren't. At this point we have to get real and talk about whose interests are being served.
Never mind whether slashing taxes on billionaires while giving scammers and polluters the freedom to scam and pollute is good for the economy as a whole; it's clearly good for billionaires, scammers, and polluters. Campaign finance being what it is, this creates a clear incentive for politicians to keep espousing a failed doctrine, for think tanks to keep inventing new excuses for that doctrine, and more.
And on such matters Donald Trump is really no worse than the rest of his party. Unfortunately, he's also no better.
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