Paul Krugman wants the government to spend more

Nobel Prize winning economist Paul Krugman is a purebred Keynesian. He wants the government to "throw the kitchen sink" at the economy.

July 6, 2010 (Bloomberg) -- Nobel Prize-winning economist Paul Krugman said the U.S. should have a “kitchen-sink strategy” that uses all fiscal and monetary policies possible to prevent the economy from sliding back into a recession.

“We are looking at what could be a very long siege here,” Krugman said in an interview today in Princeton, New Jersey, with Carol Massar of Bloomberg Television’s “Street Smart.” “We really are at a stage where we should have a kitchen-sink strategy. We should be throwing everything we can get at this.”

What the advocates of Keynes' government spending policies fail to say is that Keynes thought government spending should be reduced in good times. As the chart at the top of this column shows this has not happened. Even in good times government bureaucrats and programs are so entrenched they cannot be reduced.

President Obama has created the National Export Initiative to create jobs that export goods and services. The President makes a good speech but as usual the government talks great but only delivers force, aggression, or intimidation. The government always has a PLAN to solve the economic problems, and social problems, and environment problems, and on and on the PLANS go.

If the central planners want to create jobs they should reduce the rules and regulations that impede investments. They should eliminate the minimum wage and the EEOC rules. They should eliminate the licensing requirements to become a barber, manicurist, and even a doctor. They should reduce the length of time unemployment benefits are paid. The central planners should stop taxing producers and stop rewarding non producers.

"Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” John Maynard Keynes

Charles Tolleson