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One Half Of Simpson-Bowles Goes There: "Krugman Borders On Hysteria"

Tyler Durden's picture




 

We have all thought it. We have all muttered it under our breaths (and some of us have even written about it on blogs) but the Keynesian Krusader's borrow-and-spend-our-way-to-growth dogma was bazooka'd by former Senator Alan Simpson yesterday. "I say why don't you read our report and then get back to me", Simpson says of Krugman in a must-watch interview on Bloomberg TV, adding that "Paul Krugman is a great economist, but he ain't the best in the world. This is nuts...I love to read his stuff because it borders on hysteria" Critically, he adds on the growing demographic crisis "This is not 20 years ago, it isn't 10. It is now. You have 10,000 a day coming into the system. The demographics are there. It is all different -- it is not the same". The former Senator goes on to discuss whether US will become the next Europe, how lawmakers will sell cutbacks to the American public, whether policymakers keeping rates low are contributing to the problem, and finally on Simpson-Bowles 2.0. - "The people of America are telling their elected people how it is. Erskin and I go all over the country and tell them we do not do BS or mush, but pull up a chair and we will tell you where the country is, and they are thirsting for that."

Simpson on what he would say in response to Paul Krugman, who argues for more spending for the U.S. to grow out of recession:

"I say why don't you read our report and then get back to me. It is 67 pages talking about taking care of the vulnerable in society. It talks about not moving too fast. We don't talk about putting teeth in the shark until 2013. Paul Krugman is a great economist, but he ain't the best in the world. This is nuts. To have one guy or me or him being the total focus here, but you do not have to have a brain to know that if you owe it 16 trillion dollars when Italy is going down the slope and their debt is $2.6 trillion and ours is $16, and when you spend a buck and borrow 42 cents and when every penny of revenue that came into this country last year with income tax, excise tax and tariffs, went to only three programs. Medicare, Medicaid and Social Security. We have borrowed for the rest of it. Ask Paul how the hell you get through that. This is totally predictable, totally unsustainable.  I love to read his stuff because it borders on hysteria. He talks about the lost souls of the past, and he is in there, too. This is not 20 years ago, it isn't 10. It is now. You have 10,000 a day coming into the system. The demographics are there. It is all different -- it is not the same."

On whether the U.S. will become the next Europe:

"No, we will be a great country, but we will not be number one. Our ratings will get hit. We'll get slapped around. Let me tell you what will happen, people who have money, and Paul knows about those and I agree with Paul.  The money guys will always take care of themselves. They will always survive. But I will tell you, unless we do something right now, the little guy are the guys that get hurt. If you do nothing, and in kicks inflation and interest rates, then the guy who gets hurt the worst is the one that Krugman and all the rest of them talk about all day long, the little guy. If interest rates go up 1% or 2%, just add trillions to that debt."

On whether interest rates are contributing to the problem, enabling lawmakers to spend:

"I believe that totally. If interest rates were where they were historically, people would pay a lot better attention. No wonder corporations are putting their money aside, as interest rates are as they are. It is like a grasshopper and the ant, but no one remembers that story either."

On how lawmakers should sell cutbacks to the American public:

"I think you should go back and talk to the mayor of Philadelphia who did a beautiful job explaining what he had to do to get Philadelphia bank in the black and out of the red ink. He said here is what we're going to do, and it is going to be shared sacrifice. Everybody will get hit. If you tell people that and be honest with them, and let them bitch and roar and snort, you can make it through there. If you just close it off, draw these lines in the sand, and you have Grover Norquist, a good guy with a hell of a bad idea, who has locked in 95% people in my party, in my Congress, to say you cannot raise 1 cent of revenue, even when you get rid of a tax expenditure, which is revenue or spending by any other name, and you cannot get that done.  And the AARP sitting on their butts off while the Social Security people said here is the trustee report. This will run out of bucks in 2033 instead of 2036. They have moved up the drop dead, which will pay out 75% of its money. But it will pay out only payable benefits and scheduled benefit. Tear up the thing you get every month, because they will pay out only payable benefits, so if that isn't fakery and phoniness, I don't know what is."

On Simpson-Bowles 2.0:

"All day around here they talk about Simpson-Bowles. They did not talk about Bowles-Simpson because the acronym there is too bad. It is BS. But Simpson-Bowles, all day long they talk about it in here and it's like a stink bomb in a garden party, it isn't going away. Every person that has spoken has mention it. I am not in it for fame and fortune, but there it is. I will not use an old phrase our football coach at the University of Wyoming, but buckle up your guts."

 

"The people of America are telling their elected people how it is. Erskin and I go all over the country and tell them we do not do BS or mush, but pull up a chair in we will tell you where the country is, and they are thirsting for that."

 

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Wed, 05/16/2012 - 13:08 | 2432010 kato
kato's picture

Krugman IS NOT a great economist. He is someone who got a degree like Obama is someone who got a Nobel Prize.

Wed, 05/16/2012 - 13:23 | 2432082 Carl Spackler
Carl Spackler's picture

Krugman is both a fool and a tool.

His character flaw is that he cannot look in the mirror and see it for what it is.

He should really be in an asylum.

Wed, 05/16/2012 - 13:26 | 2432097 pods
pods's picture

Of course you are making the assumption that he in fact sees a reflection when he looks into the mirror.

Wed, 05/16/2012 - 13:41 | 2432193 WALLST8MY8BALL
WALLST8MY8BALL's picture

No he sees ManBernKrug!

Wed, 05/16/2012 - 13:56 | 2432274 Nothing To See Here
Nothing To See Here's picture

And he got his Nobel for some work he did long ago about international trade. No relationship whatever with monetary policy. But once he got the worthless prize, the MSM used him as the know-it-all guy since he has a decoration to support their idiotic views about the role of government.

Wed, 05/16/2012 - 13:38 | 2432149 Sancho Ponzi
Sancho Ponzi's picture

What really gets me is that in a world where resources are being depleted and the population of humans has gone parabolic, Krugman wants countries to pull forward demand in order to build more shit, even if that means purposely destroying shit that ain't broke so we have to build new shit. The guy is a delusional political hack. 

It's as if he's stuck in a 'Cash for Clunkers'esque 'All we need is more demand' mentality, and cannot break himself free. Plus, like the other bearded knuckleheads who run our economy, he can't and won't fess up when he screws up.

Wed, 05/16/2012 - 14:34 | 2432482 AlaricBalth
AlaricBalth's picture

The "Broken Window Fallacy" !

Wed, 05/16/2012 - 15:10 | 2432654 Omen IV
Omen IV's picture

rather than come up with silly statements with no facts - take ONE just one of Krugmans published editorials and take it apart line by line - show us all - you are a man and not just another  fool

krugman hangs out there for all to see and the clowns take pot shots with no substance including simpson -

Wed, 05/16/2012 - 13:29 | 2432099 mayhem_korner
mayhem_korner's picture

He is someone who got a degree like Obama is someone who got a Nobel Prize.

 

Apart from the one he fished out of a box o' Cracker Jacks, remind me what degree Barry holds?

Wed, 05/16/2012 - 15:21 | 2432714 5880
5880's picture

White guilt

Wed, 05/16/2012 - 13:08 | 2432024 FlyoverCountryS...
FlyoverCountrySchmuck's picture

KRUGMAN- Economics with a "gay" point of view, and Part of the GAY MAFIA, the Entirely-gay New York Times Editorial Board.

And you WONDER why he gets hysterical?

Wed, 05/16/2012 - 13:47 | 2432229 barliman
barliman's picture

 

On the topic of hysteria ...

I made a post spoofing myself as much as anyone else the other day which 'Dr Paul Krugman' on here took exception to:

http://www.zerohedge.com/news/spiegel-calls-it-akropolis-adieu#comment-2421596

and accused me of an ad hominem attack ... which surpised me till I did some backtracking. I think 'he' got riled up over my earlier post:

http://www.zerohedge.com/news/marc-faber-sees-1987-crash-approaching#comment-2413609

In which I made a "Ghostbusters" reference:

" ... we get to disasters of Biblical proportions.  As a sidebar, through an unexpected pantsing incident, it will be revealed that Paul Krugman does not have a dick."

that I think 'he' took as a personal insult. So, for the sake of clarity, dear Doctor, in the video included in my reply:

http://www.youtube.com/watch?v=Yxiv3CBMS4M

You are the Keynesian Elmer Fudd obsessed with KILLING the Wabbit of Austerity.

Which is consistent with my statement  "I did not think you had changed your viewpoint."

barliman

Wed, 05/16/2012 - 14:16 | 2432388 Convolved Man
Convolved Man's picture

Isn't it ironic that the resurgence of gay rights compels us to be more tolerant of dicks in our face? 

Or, at least hope there are fewer and less obvious ones around.

Wed, 05/16/2012 - 13:10 | 2432026 dbTX
dbTX's picture

Krugman doesn't know his ass from wild honey

Wed, 05/16/2012 - 13:11 | 2432029 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Krugman's Krazy Kase of Gonzo journalism.

Wed, 05/16/2012 - 13:12 | 2432031 goforgin
goforgin's picture

Somebody please revoke this selfish pig's Government medical care and pension.

Wed, 05/16/2012 - 13:26 | 2432102 Spastica Rex
Spastica Rex's picture

But he said "shared sacrifice." I'm sure he's including himself in that. Right?

Wed, 05/16/2012 - 13:12 | 2432045 Morrotzo
Morrotzo's picture

The line that has me rolling is the austerity line. Sell it as a shared sacrifice. Huh, really? How much suffering do you think the senators and the people who purchased them will do? My guess is zero fuckin' suffering.

Wed, 05/16/2012 - 13:27 | 2432106 Spastica Rex
Spastica Rex's picture

Austerity is for the suckers.

Wed, 05/16/2012 - 13:27 | 2432111 pods
pods's picture

I will share about 20 feet of boiled hemp with him.  Might even be able to part with more for some other people who know how to run my life better than me.

pods

Wed, 05/16/2012 - 13:15 | 2432054 schrodingers-cat
schrodingers-cat's picture

Anybody recall that Simpson-Bowles didn't actually get a report out of committee?

Wed, 05/16/2012 - 13:24 | 2432096 goforgin
goforgin's picture

The pig killed it by publicly mouthing-off and calling Social Security a cow with 300 million tits. After that......who could take the report seriously? It was a political contract hit, the report called for decreases to the defense budget and tax increase.

Wed, 05/16/2012 - 13:16 | 2432059 guinea
guinea's picture

Problem with tax increases is that it just allows the politicians to kick the ball a little bit longer and pad the unions one more time. 

Wed, 05/16/2012 - 13:19 | 2432063 penexpers
penexpers's picture

"Great economist" my ass. Krugman is a joke.

I think Simpson knows this. How he can say that Krugman is a "great economist" in one sentence and then call his writings "hysterical" in the next?


Wed, 05/16/2012 - 13:24 | 2432084 mayhem_korner
mayhem_korner's picture

 

 

I think he uses "economist" in the same way that one refers to the 12th man on a basketball team.  So he's basically saying "Krugman's in the NBA, sure, but he isn't even the best 12th man in the league."

Wed, 05/16/2012 - 13:20 | 2432075 mayhem_korner
mayhem_korner's picture

 

 

Clearly a terrorist of the highest order.

Wed, 05/16/2012 - 13:23 | 2432078 guinea
guinea's picture

Shared sacrifice is when the Communists come in and take all your property, kill the bankers on the street, nationalize every industry and send everyone into the countryside to make steel from pig iron.  That's shared sacrifice.  Everyone got screwed and sacrificed. Even the Commies themselves got screwed when the political tide changed every 12 hrs with revolutionaries becoming reactionaries and vice versa.

I don't want shared sacrifice.  I just want real clawback when the banker's actions loses his company and shareholders more money than he's ever made. I want some accountability, not heads I win, tails you lose.

Wed, 05/16/2012 - 13:27 | 2432125 mayhem_korner
mayhem_korner's picture

 

 

Shared sacrifice = you sacrifice your stuff to them, and they share it with others.  Questions?

Wed, 05/16/2012 - 13:53 | 2432248 Vince Clortho
Vince Clortho's picture

Right on.

The Big Boys already got their share.

Time to tip the scales the other way and let them wallow in pig shit.

Wed, 05/16/2012 - 16:37 | 2432986 Bicycle Repairman
Bicycle Repairman's picture

Shared sacrifice?  Phew.  I thought you said "shared orifice."

Wed, 05/16/2012 - 13:23 | 2432083 tim73
tim73's picture

"US will become the next Europe"...don't flatter yourself. US justice system is a joke, infested with gold diggers suing everybody and everything. USA is competing with China which one has more prisoners and it looks like USofA is winning. Infrastucture is crumbling and has not been taken care properly since 70's.

Education system is for rich people only, the rest can barely read and write. Still many of those Harvard and Yale graduates are bullying idiots, degree paid by their rich daddies (Look at that! My daddy's name is in THAT BUILDING!). Also, in many cases the sport team of a school is more important than the school itself. WTF is that?!

50 million people are on foodstamps and the number is still rising. Health care is a new form of torture for most Americans, hospital bills being the number one reason behind personal bankruptcies. US will become the next Africa, except majority of people are whites.

Wed, 05/16/2012 - 13:49 | 2432230 ElvisDog
ElvisDog's picture

You're forgetting one big advantage the U.S. has over Europe. We bitch and complain about Obama, et al, but compared to the current leaders in Europe the U.S. political leaders are George Fucking Washington. It's stunning and depressing to consider the ass-hats that are currently running Europe.

Wed, 05/16/2012 - 13:54 | 2432251 Vince Clortho
Vince Clortho's picture

Are you implying that we have better puppets in the U.S. than the Europeans?

Wed, 05/16/2012 - 18:54 | 2433355 ElvisDog
ElvisDog's picture

Hmm, maybe I would put it that our leaders are at least competent at being evil. The Euro leaders want to be evil too, but they are such idiots that they fuck even that up.

On a related, how does one climb up the Euro technocrat ladder? How do those guys and gals sitting on the EU committees get those jobs?

Wed, 05/16/2012 - 13:22 | 2432090 barliman
barliman's picture

 

Ahem ...

Listening to Alan Simpson for governmental and economic advice is like asking the Devil for moral guidance.

A better starting point?  Take out the proverbial chainsaws and starting cutting off branches of government at the cabinet level.

BRRRRRwwwwRRRWWWWW!  THUMP!  - Department of Energy -  GONE.

BRRRRRwwwwRRRWWWWW! THUMP! - Department of Education - GONE.

BRRRRRwwwwRRRWWWWW! THUMP! - Department of Health & Human Services - GONE.

BRRRRRwwwwRRRWWWWW! THUMP! - Department of Homeland Security  - GONE.

BRRRRRwwwwRRRWWWWW! THUMP! - Department of Transportation  - GONE.

BRRRRRwwwwRRRWWWWW! THUMP! - Department of Labor - GONE.

Take a break for lunch and see if productivity and customer service in the other branches improve by the time you finish lunch.

barliman

Wed, 05/16/2012 - 13:28 | 2432131 pods
pods's picture

I like the way you think!

Wed, 05/16/2012 - 16:50 | 2433022 margaris
margaris's picture

Sounds like the famous Ron Paul Ad.

http://www.youtube.com/watch?v=MXCZVmQ74OA

Wed, 05/16/2012 - 13:42 | 2432194 Dr. Acula
Dr. Acula's picture

>see if productivity and customer service in the other branches improve by the time you finish lunch.

There is no way to tell whether they are being productive. More likely, they are destroying wealth. Encouraging them to work harder could mean that they cause even more damage.

"Bureaucratic management , as distinguished from profit management, is the method applied in the conduct of administrative affairs, the result of which has no cash value on the market.... it has no price on the market, it cannot be bought or sold; it can therefore not be confronted with the expenses incurred in the endeavors to secure it. It results in gains, but these gains are not reflected in profits liable to expression in terms of money. The methods of economic calculation, and especially those of double-entry bookkeeping, are not applicable to them. Success or failure... cannot be ascertained according to the arithmetical procedures of profit-seeking business." - http://mises.org/Books/humanaction.pdf

Wed, 05/16/2012 - 13:50 | 2432242 barliman
barliman's picture

 

Well ...

... that would give us something to do after lunch.

Wouldn't it?

;->

barliman

Wed, 05/16/2012 - 13:46 | 2432210 catacl1sm
catacl1sm's picture

Those are small potatoes. The real cuts HAVE to happen in medicaid, medicare, social security, and 'defense'. Anything else is window dressing.

Wed, 05/16/2012 - 13:54 | 2432257 crawldaddy
crawldaddy's picture

wrong, Banks and Healthcare need to be nationalized, and cost need to be brought under control.  Fuck the middleman.  Banks and insurance companies bring nothing to the product. 

 

Healthcare cannot be allowed to be profit driven.  This is proven as other countries do it better for cheaper.

Wed, 05/16/2012 - 14:49 | 2432546 pods
pods's picture

Sweet, so I can get my blood pressure tested while I open up a bank account at the DMV? 

Be careful what you ask for, you just might get it.

pods

Wed, 05/16/2012 - 14:49 | 2432556 Matt
Matt's picture

But what about the education of the doctors then? If someone has to pay $250K+ to become a doctor, they need to be paid enough to make a decent living plus cover their student loan payments, right?

What about the equipment and medicine the healthcare system uses?

Where does it end? At what point in the long chain that goes from the drug makers and researchers, through the education of the doctors and the pharmacists and the drug researchers, through the financing of it all, to the patient, do you stop having it be nationalized?

If you nationalize the entire system, who takes the risks involved in developing new drugs that might not work out? Does Healthcare then get an unlimited budget to develop new treatments?

Wed, 05/16/2012 - 16:17 | 2432909 Henry Hub
Henry Hub's picture

***who takes the risks involved in developing new drugs that might not work out?***

Do you mean drugs like these? Drugs brought to you by your geat benefactor Big Pharma.

http://www.fda.gov/Drugs/DrugSafety/DrugRecalls/default.htm

 

 

Thu, 05/17/2012 - 11:38 | 2435740 Matt
Matt's picture

Of course there are failures along with successes. Would you rather go back to pre-penicillin days, before pharma, to having 30 to 50 percent of the population wiped out everytime there is an epidemic?

Wed, 05/16/2012 - 15:50 | 2432358 barliman
barliman's picture

 

Day 2

A NEW DEAL

(sorry, I'd love to have this scroll up your screens a la Star Wars but I don't know how to do that on here)

Medicaid, Medicare & Social Security would be significantly refined in terms of forward looking benefits (meaning everybody's benefits effective as of Day 2) to provide them with a choice:

  1. You will receive all benefits as originally promised prior to Day 2 provided you agree to opt out of any expensive extraordinary treatment for an "end of life" situation and will instead accept hospice care to make your passing as painless as possible.  If you choose to pay for your own extraordinary treatment you will still receive your original benefits but acknowledge there will be no extensive police investigations if you pass away suddenly before such treatment can be carried out.
  2. Non-participation in option 1 will categorize you as someone who has chosen to accept whatever reduction/modification in the originally planned benefits are deemed necessary to achieve and maintain a balanced budget.

At this point, take a couple of months off and let the "discussion" develop before coming back to address Defense spending.

By the way, Day 2 on top of Day 1 WILL balance the budget. Go crunch the numbers if you don't believe me.

barliman

P.S. Seriously? You didn't think I had a plan for this?

Wed, 05/16/2012 - 17:39 | 2433170 The Alarmist
The Alarmist's picture

Cut DHS?  This makes me very afraid.  If we cut DHS, I'm going to have to start paying strangers to feel me up.

Wed, 05/16/2012 - 13:23 | 2432092 Robot Traders Mom
Robot Traders Mom's picture

Paul Krugman is a great economist

 

Really? Keep in mind, Simpson was the same deficit clown pushing all the Reagan budgets...

Wed, 05/16/2012 - 13:27 | 2432121 resurger
resurger's picture

i know another great economist...

Max Ficher

Wed, 05/16/2012 - 13:25 | 2432094 StockHut
StockHut's picture

You can't beat that old school, no bullshit commentary.  Love that guy.

Wed, 05/16/2012 - 13:25 | 2432103 New American Re...
New American Revolution's picture

www.nar2012.com, will empower all 162,000,000 registered American voters to take back Congress, reclaim all constitutional powers of Congress and place them back into the Public Forum.   It's a catalyst going off that transforms every arm of government back into liberty and restores the fiscal stability currently missing in our Nation.  

Serfs Up America!

Wed, 05/16/2012 - 13:28 | 2432134 porrannor
porrannor's picture

An ex senator is telling us how bad it is? isn't it something. a senator who participated in selling off our nation to the highest bidder is telling us of the results of his slimy past and present actions. Isn't it something? Will those criminals ever go away? 

 

Wed, 05/16/2012 - 13:31 | 2432140 the not so migh...
the not so mighty maximiza's picture

Simpson is a Pro bailout CFR member, he can go fist himself to death!!

Wed, 05/16/2012 - 13:33 | 2432145 slackrabbit
slackrabbit's picture

Sen Simpson speaking the truth...pity no one will listen because he like the rest on them all played the same fiscal games in the past.

 

Wed, 05/16/2012 - 13:38 | 2432175 porrannor
porrannor's picture

"Sen Simpson speaking the truth..."

 

What do you think he was doing while in senate? I will tell you what: stealing from us. He is as much of a sleazeball as the rest of them.

Wed, 05/16/2012 - 13:38 | 2432180 NotApplicable
NotApplicable's picture

Which is why he does it. Divide and conquer is the only tool the status quo has.

Wed, 05/16/2012 - 13:43 | 2432206 Seasmoke
Seasmoke's picture

why do all criminals seem to find Jesus AFTER they committed their crimes and not BEFORE

Wed, 05/16/2012 - 13:47 | 2432212 crawldaddy
crawldaddy's picture

a fucking dinosuar who helped in building this cluster fuck.  Fuck this old man, why listen to someone who is part of the problem.

Wed, 05/16/2012 - 13:49 | 2432215 TWSceptic
TWSceptic's picture

A wise man, and I don't say that often about politicians.

Wed, 05/16/2012 - 13:50 | 2432241 crawldaddy
crawldaddy's picture

wise?  all he is saying is that the rich will continue to fuck the poor, is he wise by telling the poor to get use to it?  fuck him.  He is part of the problem. He helped create this mess.

Wed, 05/16/2012 - 14:01 | 2432259 TWSceptic
TWSceptic's picture

He explained that politicians need to cut spending and tell the people that they need to do that, and the people therefore will get lesser handouts from govt. Sorry if that went over your head or if you disagree with austerity, but it is the desired and correct message right now.

 

Also long term, the poor get fucked by current spending policies, not by austerity.

Wed, 05/16/2012 - 14:55 | 2432593 pods
pods's picture

If we were to stop deficit spending at this moment, the USA would become the former USA within a couple of months.

Our system REQUIRES continual debt expansion.  There is no soft landing while falling down the deflationary vortex.

So unless you are ready for a cross between Mad Max and The Road, you better be thankful that the government is spending money like crazy.

It has given you 4 years and counting to get your stuff in order.  

I agree on the need for austerity, but not for the wild eyed thoughts of getting back to sustainability or other pie in the sky dreams.  

I am a Roman who patiently awaits the arrival of the Goths.

pods

Wed, 05/16/2012 - 17:41 | 2433177 The Alarmist
The Alarmist's picture

Patiently waiting?  By the end of the Western Empire, a number of Romans were actually running to the Goths to escape the bonds of their overtaxing masters.

Wed, 05/16/2012 - 15:34 | 2432768 Oreilly
Oreilly's picture

If you read the Simpson-Bowles plan it does not have much to do with cutting taxes.  It rearranges the tax structure, eliminating a lot of "tax expenditures" such as mortgage deductions and capital gains in order to increase the amount of revenue.  As has been pointed out on this site and elsewhere, the current problem has nothing to do with revenue and everything to do with spending. Senator Simpson's current ideas do not revolve around politicians cutting spending, but are oriented towards using government largess to support the vulernable in society.  Whatever you think of that, it is not cutting spending by a long shot.

Wed, 05/16/2012 - 16:29 | 2432957 Henry Hub
Henry Hub's picture

***the poor get fucked by current spending policies, not by austerity.***

How right you are. If we could end food stamps to all the people who lost their jobs and have run out UI how much better they would be. If we give these sucker enough austerity mabe they would pull themselves up by their own bootstraps. Sink or swim bozo, this is the USA

 

 

Wed, 05/16/2012 - 16:00 | 2432232 Null Shrub
Null Shrub's picture

What Krugman advocates (or moreover what Zero Hedge continually reports he advocates) has nothing to do with what Keynes advocated which was to increase direct spending by government and not to loan untold trillions to banks or embark on round after round of quantitative easing.  And it will never be true that Krugman (as Zero Hedge represents him) is Keynsian no matter how many times Zero Hedge employs the propagandistic technique of repeating the lie.  Similarly, Simpson is as wacky and off base with his Friedmanesque solutions as Friedman was, for which Latin America provides ample evidence.  Unshackling themselves from the Chicago School's disastrous polices has overwhelmingly been positive for Argentina, Bolivia, Ecuador, etc.

Wed, 05/16/2012 - 20:28 | 2433581 PulpCutter
PulpCutter's picture

Actually, Krugman advocates govt spending (e.g., stimulus on infrastructure needed for future) and is critical of the lending to WallSt - at least in anything I've heard from him.

Wed, 05/16/2012 - 13:52 | 2432245 azzhatter
azzhatter's picture

I guess I believe in redemption and it's not beyond belief that Simpson who once was busy fucking us up the ass while in government, could actually be trying to do the right thing now

Wed, 05/16/2012 - 14:00 | 2432283 Vince Clortho
Vince Clortho's picture

Typical Disinfo operation.

Release 20 different stories on the issue.

Some of the stories contain elements of the truth.  Others, not so much.

So Simpson throws out a few morsels that everyone on ZH has known about for years.

I need to find a tissue to dab the tear in my eye.

 

Wed, 05/16/2012 - 14:10 | 2432361 USMC4the win
USMC4the win's picture

Favorite austerity quote of all time (few years ago found and have on my wall):

"Austerity is mathematically impossible given that no one at the top benefits from it and no one at the bottom can bear it"

author unknown.

We are all doomed.

Wed, 05/16/2012 - 14:23 | 2432441 sbenard
sbenard's picture

I've been saying Crazy Krugman for years!

Wed, 05/16/2012 - 14:51 | 2432564 mendigo
mendigo's picture

My god that was painful.
How many ways can a person say nothing.
This old useless political hack needs to get out of the way and let someone useful step in. I thing he became confused by his own pointless anecdotes. There is no freakin difference democrats=republicans, Robama=Obomney. Paul is the nuclear option.

Wed, 05/16/2012 - 14:57 | 2432598 TheMonetaryRed
TheMonetaryRed's picture

Sad, dopey rampblings from a great Senator who is rapidly becoming a silly, old man.

Let's say the U.S. government decided to homor all its obligations in gold, in a move to create a Ron Paul Paradise. What would happen? The price of gold would skyrocket as the government exchanged newly-printed money for gold. So what?

Vast amounts of money would be spent on useless endeavors like gold mining, producing little economic benefit but hyper-rewarding owners of gold-related claims. There would peobably be some significant knock-on inflation in commodities, metals in particular, but probably not that much. After all, bubbles in particular markets can inflate for decades without affecting the overall economy.  

After the surge in inflation, the pockets of bondholders would be stuffed with gold bubbles. According to the "Austrians" bondholders would now be fully compensated. Great. What about the rest of the economy? Nothing. No positive change. Nobody would sell their gold for 30 years because developed-world governments saddled with a demographic bulge would keep on printing to buy gold. Rather than investing in anything productive, anyone with extra money would buy into the gold bubble.  

To the extent those people sold gold and invested in productive things with normal cash and debt, the economy would benefit. But it would be a product of a bubble "inflated" by government spending. 

The question is not whether governments spend but when they spend and how productive is their spending. The question is not what governments "owe" - as if they owe to some supernatural force of nature - but how productive aand positively-contributing are the people who finance the government. If they are just speculators and rentiers - as in the gold bubble hypothetical - their lack of positive economic intent is ultimately self-defeating. 

Governments have to stop worrying about paying filthy rich people and start thinking about alternate financing. In the mean time, they have to worry about growth, not deficits.

 

 

Wed, 05/16/2012 - 20:26 | 2433574 PulpCutter
PulpCutter's picture

Exactly.  We have a whole age bracket of motivated, skilled recent college grads who can't find jobs - they're producing nothing, they're not learning how to put their new skills to practice, and they have no money so they can't buy anything. 

Great strategy, Simpson - all so you can, what, make the other party look bad?  When you're in a post-credit bubble liquidity trap, govt spending works, and it works without an inflationary bustup.  Simple, objective fact, based on data from prior history. 

Wed, 05/16/2012 - 15:13 | 2432676 jmc8888
jmc8888's picture

He's right that Krugman is crazy...but then again so is he.

Why don't they both run for office, we can call it the lunaticket Krugman/Simpson.

Glass-Steagall

Wed, 05/16/2012 - 15:57 | 2432725 moonstears
moonstears's picture

Note to Bloomberg TV: Next time, more Trish shots in the frame, less esteemed whoever. That is all.

(p.s. I guess Bloomberg thinks this is new enlightening news? This cat knows the problem cause he helped create it. To his credit: He is a vet. There were far fewer 0000s on the checks back then, and he was an early gay rights advocate( let's all stir that fuckin' pot some more, it's been hours now since we have.))

Wed, 05/16/2012 - 15:42 | 2432793 KandiRaverHipster
KandiRaverHipster's picture

that's a great video.  what conference is he at?  city?

Wed, 05/16/2012 - 16:38 | 2432982 Bicycle Repairman
Bicycle Repairman's picture

Simpson?  I thought his "freshness date" had passed.

Wed, 05/16/2012 - 17:18 | 2433104 IMA5U
IMA5U's picture

Trish Regan ... best breasts in the business

 

And arguably looks better even a little plump....

Wed, 05/16/2012 - 17:44 | 2433183 The Alarmist
The Alarmist's picture

How very political Alan Simpson continues to be to this day.  "Borders on Hysteria" is little more than a politician's clever way of saying that Krugman is Fu*king nuts.

Wed, 05/16/2012 - 20:21 | 2433552 PulpCutter
PulpCutter's picture

Humorous, because all Krugman is doing is presenting facts and objective analysis.  It's Simpson's rhetoric that's hysterical. 

In a post-credit bubble liquidity trap, govt stimulus works, and works without being inflationary.  Loons like Simpson have been predicting an inflationary meltdown and dollar demise "within the next two years", for the last decade.  See any?  IBM just sold 3yr bonds for 0.75%. 

Wed, 05/16/2012 - 18:01 | 2433233 Olympia
Olympia's picture

How is it possible that the European Union allows the weak states to enter the international money market and borrow the money they need without help – based on their own potentials? How is it possible that the “chain” of interests of euro can let its weak “links” exposed to outside pressuresHow is it possible for a “herd” with common interests to let each “ship” defend itself against the wolves, without help, and its general security threatened? How is it possible for Greece, which represents a minor 3% of the Eurozone’s economy, to be allowed to threaten the other 97% of that economy, due to the latter’s weakness?

The European Union should be the one borrowing from the national banking system – thus dealing with profiteers itself based on its overall potential – not its weak “links” alone. The latter should be under the EU’s protection and constant monitoring. They should borrow from it at a subsequent time and if they became victims of profiteering, the problem should be kept in the bosom of the euro. Domestic profiteering should bring profits to Europe’s influentials, therefore bring profits in the euro area, and not threaten it.

 

www.eamb-ydrohoos.blogspot.com/2010/02/ten-plagues-of-pharaoh.html

 

Authored by Panagiotis Traianou

Thu, 05/17/2012 - 11:22 | 2435660 pcrs
pcrs's picture

deliberate:remember failure=success

All failure shows is that the EUSSSR elites need more power and more money and a tax base and an army.

In the free market failure=failure. Yo udeliver crap the consumer stays away and that punishes you

In the gvt failure=success, it means you would have succeeded if only you would have had more power and money and personel and tax slaves to serve you

Wed, 05/16/2012 - 23:30 | 2434044 smartone
smartone's picture

OMG Krugman is nuts

he said that Iraq War was hype and no Sadaam was not a threat -- oh wait he was right about that

he said that Austerity was not going to work and EU  would end up in a double dip recession  -- oh wait he was right about that 

he said that the modern republican party cares nothing about deficit or debt  but only about tax cuts for the wealthy above all else -- oh wait he was right about that too.

he that the Zero rate trap that happen in Japan would happen in US .. oh wait he was right about that

 

wait what was the question????

 

Thu, 05/17/2012 - 11:19 | 2435645 pcrs
pcrs's picture

Anyone can predict that western economies will fail, whether the gvt spends your money on warfare or you spend it yourself. It will just fail faster when the gvt spends your money.

There is no choice:austerity or not. All the gvt can do is steal a trillion here and spend it over there. The only difference with the original owners spending is, is that they might have given consumers something they wanted and politicians dont.

All  these idiots that think that the gvt can spend out of the blue sky, without taking it away from someone else, sickening believers in spooky magic of the coercion of the monopoly of violence.

Thu, 05/17/2012 - 11:15 | 2435617 pcrs
pcrs's picture

hey tax slave:after we blow all your money, we will wrap our arm around your shoulder and speak of :"shared sacrifice"

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