150 Economists Sign Letter Against Increase Of US Debt; Spoiler Alert - Paul Krugman Is Not Among Them

Tyler Durden's picture

Following last night's largely irrelevant and extremely theatrical vote for a clean debt ceiling hike, this morning 150 economists (of which those belonging to Ivy League institutions can be counted on one finger... the middle one) have signed a letter warning that "a debt limit increase without spending cuts and budget reform will destroy American jobs." Luckily, since a clean debt ceiling hike will have no impact on the BLS birth/death model, there is no reason to bother Paul Krugman with the fact that ever more of his peers think that those calling for endless fiscal largesse are now a part of the problem, and not the solution. From the letter: "An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private- sector job creation in America. It is critical that any debt limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president. We will not succeed in balancing the federal budget and overcoming the challenges of our debt until we succeed in committing ourselves to government policies that allow our economy to grow. An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms would harm private-sector job growth and represent a tremendous setback in the effort to deal with our national debt." The full list of signatories is below. Among them are Nobel prize winner and Euro scourge Robert Mundell, John Taylor, Alan Meltzer, Douglas Holtz-Eakin, as well as former U.S. Secretary of State George P. Shultz, and many more. Suddenly the idea of buying US CDS does not seem so outlandish.

150 Economists

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Josh Randall's picture

These people are obviously paid shills for the "little people" whom do not want austerity

Clueless Economist's picture

I did not sign the letter, but rather I advise that we increase the debt by $5 Trillion in order to create or save 5 Million shovel-ready jobs.

Mr. Poon's picture

You're losing your touch.  The amount the government should spend should be "Whatever number I am thinking--only bigger!"

Fish Gone Bad's picture

Krugman is an interesting conundrum.  He is 50% proud of himself, 20% clueless, 20% genius, 9% pure fucking evil, and 1% sycophant.

JW n FL's picture

all of you idiots above me are fucking Moe-Rons!


1. $18 Trillion Dollars in 3 years printed out of thin air.. ALL went to Bankers / AAA Rated Corps! NOT to the Poor.

2. You ALL are fucking idiots!



Top U.S. Lobbying Banks Got Biggest Bailouts


http://goo.gl/FnxBZ  Treasury Direct $14 Trillion Debt

http://goo.gl/TMl74   $15 Trillion in Loans

http://goo.gl/EXzal  / ='s $29T


http://research.stlouisfed.org/fred2/series/BASE 3 Years 300% More Dollars Printed Out of Thin Air!


Corporations Own the Lobby!


The Lobby Owns the Government!


Law Enforcement works for the Duly Elected Lobby Whores!


“We the People” are Screwed!


Swurveman's picture

I didn't see anything in the letter about raising revenues.

The translation of this letter is: "fuck the poor and the elderly".

taint's picture

Nah, it says, fuck the nonsavers and imprudent...as the savers and productive are fucked out. 

SRV - ES339's picture

Absolutely... I'm sure they're all supported by the Chamber of Commerce and believe lower taxes for entrepreneurs (rich), gutting regulation (it worked so well last time), and ending all those pesky, expensive and unnecessary support programs for the poor and elderly is the only way to prosparity (patriots all).

maximin thrax's picture

That's because increased taxes only change who will spend the money into the economy. The game now afoot is to maintain GDP at above-depression levels (who wants to be known as the prez during the second great depression?). That requires net credit expansion, which only the federal government is capable of providing.

Borrowing leads to a net increase in spending (until you have to pay it back). When government lets you hold onto your dollar (tax cut) and borrows that dollar instead, two bucks get spent into the economy. Of course, eventually, you do start paying back the debt with interest (instead of endless rollovers). So instead of supplementing a dollar of tax revenue with a dollar of debt, the federal government will have to take that dollar, and another in interest, out of future spending on programs for the poor and elderly to pay back the dollar borrowed today.

Regardless of who has a problem with it, this government is going to continue to borrow money to spend as long as GDP would plunge to depression levels without its deficit spending. First it was TARP, then a big economic stimulus bill, now 99 weeks of unemployment. Anything that sounds good and generous that accomplishes the required trillions credit expansion will be sold to the public, who out of self interest can't say no to the freebies. Through constant rolling-over of debt and interest rate suppression by the Fed, Americans (until the current bout with inflation) really haven't felt the pain of all that borrowing, so they can't comprehend the cost.

And to accommodate that borrowing the Fed will maintain low interest rates with a glut of money. This nation cannot service her debt, let alone add to it, without artificially low interest rates. Deflationists don't believe one can experience inflation without rising wages, but clearly the mechanism for government's infusion of money into people's hands through safety nets and bail-outs is in place. The question is how far will government go. The answer is until it breaks.

cranky-old-geezer's picture

There simply isn't enoung money to support casino-gambling bankers, crony corporations, and poor / elderly too. 

Casino-gambling bankers and crony corporations create jobs, poor / elderly don't. 

Get your prorities right. 

Casino-gambling bankers and crony corporations will eventually need 50 - 75 trillion to create jobs, so raise the debt ceiling to 100 trillion for pete's sake. 

We gotta have those jobs.  No amount of money printing is too much to create those jobs.


TruthInSunshine's picture

Paul Krugman's anxiously awaited, Nobel Laureate worthy economic treatise is about to be released.

It's titled:

'How the U.S. Government Can Have Bernanke Print The Number of Dollars Equal to Our Current National Debt In Order To Pay Off Existing Creditors, Thus Wiping Said Debt Out, And Also Send Every American A Gift Card in The Form of Pre-Paid Visa With a Balance of $100,000 BernankBux.'


In his great and bold proposal, Krugman argues forcefully that this plan would strengthen the USD, which is a core goal of Bernanke & Geithner (and NerObama), and how it this would also help achieve the new full employment rate incorporating a 30% UE figure, while helping to stabilize prices of all goods and services (especially food and energy).

LRC Fan's picture

Cue Clueless Economist with his analysis and prediction...

Mr. Poon's picture

It should be noted that Krugman has shown little to no concern over the strength of the dollar.

But beyond that, yes, his implied plan is more or less to print enough money to meet all the government's obligations as well as provide full employment for every person in the U.S.  He doesn't put it in those stark terms because he knows fully well he would (rightly) be ridiculed for it, so he just hints and suggests and insinuates and implies.

And again, he has no interest in what impact those policies would have on the USD; and to the related concern, that massive expansion would push interest rates up, his defense has basically been "it hasn't happened yet so there's nothing to worry about".  The old "I'm not dead yet so I must be immortal" argument, only in economic terms.

Libertarian777's picture

Krugman's follow up book will be:

"War on Iran. How a 30 year protracted military engagement will solve unemployment, construction, healthcare and boost GDP"

In his Pulitzer prize willing sequel, Krugman proves unequivocally that a conventional war with Iran would be a boost for the defense industry. The full 'free market' privatisation of the military (which produces some of the highest paying contracting jobs, such as $250,000 truck driver salaries), will attract large swathes of the 8.9% unemployed, and those on food stamps to join Xe.

The tens of thousands that are maimed and injured in the ensuing war will ensure a robust growth industry in the healthcare sector.

And the amount of tomahawks and bombs that will be used will significantly increase the demand for US steel and US chemicals (but not silver or gold of course...those remain barbarous relics), which will be a boon to those industries.

White.Star.Line's picture

I for one want austerity - for the banksters.

Also, severe poverty and starvation. (Give em a taste of their own medicine)

Henry Chinaski's picture

People are waking up.  Now economists are waking up too.

Dr. Richard Head's picture

200 economists spoke out against the bailouts - http://thebeezbuzz.com/pdf/cato_stimulus.pdf

That didn't seem to put a dent in the fascism mobile though.

SilverDosed's picture

Seeing as how the Univ of Texas bought a Billion in gold (wonder who first pitched that idea) I'd have to say....

silver bitchez

AssFire's picture

I've said it before and I'll say it again, We are now two separate nations:

One that works (in the private sector) and pays taxes vs those that live off the stolen wealth of the taxpayer. <We are the new slaves>


We prefer to be our own nation. In Texas we reject the welfare state and hope we can finally shed the nation that forced it's citizens at gunpoint to enslave us.

Now send us our gold and leave us the fuck alone.

Dr. Richard Head's picture

Hard to reject the Federales when they threaten "no-fly" zones because of a proposed TSA molestation bill - www.youtube.com/watch?v=2GAZK0x_m-U

The UN will suddenly find nuclear bombs being made by the Texas state legislature if the bread is cut out.

Pegasus Muse's picture

In Texas we reject the welfare state and hope we can finally shed the nation that forced it's citizens at gunpoint to enslave us.

This from a citizen of the state that produced LBJ, creator of the Great Society and Commander in Chief who directed a huge military expansion in Viet Nam War.  lol

JW n FL's picture

Bush! no oil in texas to be found!

downwiththebanks's picture

No military contractors in Texas sucking at the teat of the Military Industrial Complex, either.

Nope - nothing but self-sufficiency and rugged individualism (except when the 'country' was founded using Uncle Sam's weapons and strong-arming).

downwiththebanks's picture

The 'private sector' RELIES UPON 2 things, fundamentally:  looting from the public and assistance from government, which they own, in doing so.

You may not have noticed, but that has been true for about the last 5 centuries. 

JW n FL's picture

he spends all his time in st barts!

Jayda1850's picture

but with all the damage done by the tornadoes, that should be worth atleast 1% GDP growth. Just think of all the demand that is created.




Thisson's picture

I was speaking with a financial advisor from Morgan Stanley the other day who told me that the tornadoes are good for the economy.

I tried telling him about Bastiat's fallacy, but it was pointless.

The point is that people actually believe the Keynesian claptrap that prosperity comes from endlessly expanding credit and printing money.

TruthInSunshine's picture

If tornadoes are good, tsunamis and earthquakes (wiping out nuclear power plants and breaching their containment structures) are better, and atomic warfare is the best stimulus of all.

cranky-old-geezer's picture

And Fukushima should be good for ...gosh ...5% GDP growth minimum.

Cognitive Dissonance's picture

Clearly 150 economists don't equal one Paul Krugman because only Paul Krugman is the official keeper of the public (financial) myth and thus a MSM darling.

TruthInSunshine's picture

Chuck Norris refuses to debate Paul Krugman.

Cleanclog's picture

Watch Inside Job for more on the paid for shills, expert witnesses, and absurb "think tanks".

lizzy36's picture

150 economists all looking for a paid gig on fox news.

Color me shocked.

tarsubil's picture

You mean Faux News? Der-di-der-di-der!

willien1derland's picture

Where the HELL were all these economists when 'No-Doc' & 'Pick-A-Pay' mortgages skewed the housing markets....Again, WHERE the hell are all these economists regarding the impact of derivative exposure??? 


Ohhh sorry THAT'S right...they all received record bonuses due to the decision to socialize all Wall Street & Banksters losses...Paaathetic! 

wisefool's picture

<sarc> Why is Krugman not on there? Was the document format incompatible with his I-Pad</sarc>

theMAXILOPEZpsycho's picture

Its frightening how much less I'd know about economics had I studied economics in university

Thisson's picture

Don't succumb to that.  I studied economics and it's helped me to understand why the shit most economists say is wrong: because economics makes a lot of assumptions that are not valid in the real world (e.g. perfect information, manipulation-free markets, etc.).

theMAXILOPEZpsycho's picture

was it really worth spending 3-4 years just to learn that??

why not just read the right books instead of being forced to read all the wrong ones?

skipjack's picture

...because some non-Ivy college econ departments actually teach Austrian economics...

downwiththebanks's picture


Up with deflation and genocide!

Urban Redneck's picture

because economics makes a lot of assumptions that are not valid in the real world

It starts on the very first day, even before university level economics - ceteris paribus - everything else is never equal in the real world.

digalert's picture

Can't believe you mention Krugman...he's a Nobel Laureate. Barama's got one of them Nobel doohickeys too.

NidStyles's picture

That beg's the question, does a Nobel Prize measure the quality of the recipient, or the quality of the Isntitution that award's it. Note the lack of the question mark.



BlackholeDivestment's picture

...an economist named ''Booth'' at ''Chapman'' University!!!

I'm gonna take a ''shot in the dark'' on this one, bet he's one of those ''economist hitmen''. Paging Mr. Black http://www.youtube.com/watch?v=n-pR0MOJKZM

Caviar Emptor's picture

But again....we know what they're against....but what are they For?

It's easier to criticize than to perform. And we got plenty of critics on both sides. I'm the first to say we should not have the debt that we do (but to me the mistakes were made 30-40 years ago).

But there isn't a single one of these Nobel Laureate crowned heads, not a single economics genius nor a single political "leader" who has a proposal on how to re-structure and re-tool for the future given the new realities. 

Why? Because most don't even  believe we should change anything. Most are defending an economic or political construct that they themselves endorsed and supported. They bet the farm on it. Others simply can't possibly not be backing the status quo. ANY status quo. If they were living in fascist Germany they would back it. But for the most part, the main reason we;re in a slump is because there's a slump in ideas, creativity and leadership. 

I am a Man I am Forty's picture

nonsense, cut spending, it's not complicated, you don't need ideas or creativity, it's quit fucking spending, it's not rocket science, all these people that are living off of everyone else are going to have to live less off everyone else


Thisson's picture

There are too many recipients receiving government spending - it's the "tyranny of the majority" problem.  The Grasshoppers outnumber the Ants in the voting booths.