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.

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