Paul Krugman has always had a bit more celebrity wannabe than economist in him and his recent tussle with Estonia only highlights that. Of course critics of Estonia government may say that a sovereign nation’s officials would be better served by not getting into it with the bearded former Enron advisor. However, if the best he can offer is that Estonia’s recovery (see my earlier post) is only “partial” and somehow that if you buy into that Estonia has recovered because of austerity you must also acquiesce that FDR’s New Deal must get credit for the “incredible success” of “promoting unions” and “increasing government employment”…
Okay, I give. I hadn’t thought about it like that, Paul.
Following Krugman’s analysis, let me pause here and acknowledge Obama’s impressive track record of presiding over the greatest public debt increase in the history of our republic. While we’re at it, let me also give the president his due for accelerating the greatest monetary expansion in history along with hastening the inevitable economic demise of a country that borrows massive amounts to spend it on things that provide no return. What we’re left with is an unsupportable amount of debt with absolutely nothing to show for it–except perhaps an insatiable demand for more public sector jobs and benefits. Bravo Obama.
Can governments impact the economy? Of course. It’s why this election is so important.