Mysterious Math Emanating from the Conscience of a Liberal
Abstract: We can search the cosmos for invariant processes such as the grand celestial movements of our moon and bright stars and ground our best predictions on the historical stability of their repetitive state. Few things can perform in such a predictable manner on this planet, except, we must note, for certain political platitudes that are strewn about unaltered for decades in defense of foul and phony government and to aid the eternal quest for money from others. Today we add more proof that the so-called economist Paul Krugman is something of a lessor stature when compared to a one-trick pony: All he ever does is bawl for higher taxes, more spending and bigger government. Some things are cast in prehistoric stone. Proof follows below.
Generally, in propaganda exercises of the basest sort, it is permissible to ignite enticing political flames with the conclusion boldly stated up front and then use the remaining text to amplify the original assumption thus providing a ‘proof’ that the initial argument was sound. This forms the tightest ring of circular logic that such techniques can devise as long as no probing questions are allowed. An example bursts forth in the latest Opinion Pages of the New York Times as of 8.06.11:
“Amid all the debt hysteria, it’s worth taking a look at the actual arithmetic here — because what this arithmetic says is that the size of the deficit in the next year or two hardly matters for the US fiscal position — and in fact the size over the next decade is barely significant.”-- The Arithmetic of Near-term Deficits and Debt By Paul Krugman August 6, 2011, 12:00 PM [1][Emphasis is mine in all quotes unless specifically stated otherwise.]
Properly inaugurating this screed with ‘defined facts’ is a stale but acceptable method of initiating a propaganda piece. The NYT excels in this practice since Walter Duranty taught them how to do this and garnered some Pulitzer Prize and wild applause from the Communists and the simple for his lies.
The word tautological must be expanded in scope and depth to accommodate most of the hackneyed scribbles and coached mental gyrations of the near-financially bankrupt New York Times—aka the Walter Duranty Papers.[2] To suggest that there is but a short stack of soiled, but politically sanctified clichés, to guide the ‘writers’ in their written works in the Opinion section of this ragzine is to offer too much latitude to those who are intellectually and morally chained in such a narrow media latrine. Words like drone or stooge must be intercalated with the revised context of tautology to describe what passes for thought in this section. This will become self-evident shortly.
So, we continue on in search of the hard facts:
“Start with interest rates. What matters for debt sustainability is the real interest rate, since what matters is keeping real debt, not nominal debt, from growing. (World War II debt never got paid off, it just eroded in real terms to the point where it was trivial). As of yesterday, the US government could lock in 30-year bonds at a real interest rate of 1.25%. That means that a trillion dollars in extra debt would mean $12.5 billion a year in additional real interest payments.
Meanwhile, the CBO estimates potential real GDP in 2021 at about $18 trillion in 2005 dollars, or around $19 trillion in 2011 dollars.”-- The Arithmetic of Near-term Deficits
Now, as to the ‘facts’ it turns out that our nominal interest rate is indeed low [I calculate 1.38% using a nominal 200 bln in debt service on 14.5 trillion in debt] but we can quibble about that later. So, that IS a fact.
Now, we follow a hard fact with some phony political estimate, and that is the trick for the day!
“Meanwhile, the CBO estimates potential real GDP in 2021 at about $18 trillion in 2005 dollars, or around $19 trillion in 2011 dollars.
Put these together, and they say that an extra trillion in borrowing adds something like 0.07% of GDP in future debt service costs. Yes, that zero belongs there. The $4 trillion S&P said it needed to see clocks in at less than 0.3% of GDP.”-- The Arithmetic of Near-term Deficits
Here a hard fact is followed by some blob of nonsense whereby the first fact lends some synthetic credibility to the whole argument. The conclusion then is an assumption.
Here, we must peek into the source of this wonderful prediction and we find that it originates from our famous CBO [Congressional Baloney Orifice].[3] To say that this organization is anything less than a pack of stooges who must accept pet political assumptions stuffed into their little minds as a basis for their calculations is a broad acerbity—but accurate. The curve Krugman describes sweeps upwardly in some grand majestic motion and is smooth, ever rising and impressive. It is nothing but a guess that is puffed up with political fluff and nonsense. It assumes that GDP growth from 1950 will eventually reach infinity [or beyond] and is, in true fact, a sacrosanct basin of truth. It is not. It is a smoothed curve as it even boldly displays US recessions in shaded areas. Did Krugman mention that our revised GDP is less than 1% and will probably sink lower. Gee, wouldn’t this put a little downward droop to this wonderful curve?? Not in the political world of the frantic left.
We can tie this projection in with some other stunning conclusions that must include massive spending and that dismisses any attempts at austerity, the method now followed by the EU as they tried QE [idiot spending with printed monies with no limits] and it failed and now their economies are crashing in debt led by the PIIGS.
We cannot afford not to spend wildly:
“Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.”[4] --1938 in 2010 By Paul Krugman
At this point, we can see that the ‘math’ here is some soggy delirium oozing from the troubled minds of politicians who have brought us to the very edge of a deep financial carcass and we are about to tumble over the edge into some financial abyss. As such, the author here is a political chum-chucker who bends and twists any resource to make his tautological point that we must always spend, increase taxes and grow government. The Dow crashed some 634 points an hour ago.
How disgusting.
Comments to: ryckki@gmail.com
[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.
“He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet societybut also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Unionwhich only history could judge.”http://en.wikipedia.org/wiki/Walter_Duranty
[3] http://research.stlouisfed.org/fred2/series/GDPPOT?cid=106
Dean BakerCo-Director of the Center for Economic and Policy Research
Irresponsibly Following the Congressional Budget Office
http://www.huffingtonpost.com/dean-baker/irresponsibly-following-t_b_272965.html
Bush Deficit vs. Obama Deficit in Pictures
http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/
November 21, 1994
CBO and Economic Policy
http://www.house.gov/jec/fiscal/tx-grwth/cbo11-94/cbo11-94.htm
There are many more examples of the CBO just offering some politico what they want to hear.
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