Paul Krugman was on Morning Joe (video below) this week and put forth his standard arguments about job creation needing to take priority over deficits. (I encourage people to watch it for a thorough run-through of the basic Keynesian arguments.) The co-host, Joe Scarborough, wrote an opinion piece on Politico blasting Krugman. What strikes me is that the opinion piece is shoddy ranting that uses little evidence and mischaracterizes Krugman’s positions. Yet deficit scolds Simpson-Bowles praised the article. I don’t have time to run through everything, but a few key points:
1) The article is entitled “Paul Krugman vs. the world.” Krugman listed on his blog many of the mainstream economists who hold positions similar to him. Check it out for the details.
2) Scarborough blatantly oversimplifies Krugman’s position:
“Mr. Krugman suggested Medicare and Medicaid shortfalls should be ignored…saying that no one could predict the future of entitlements so there was no need to worry until the programs became insolvent.”
If you watch the show, while Krugman says he thinks it can’t be predicted with absolute certainty that Medicare/Medicaid spending will be unsustainable in the future, he does say it’s a “good bet.” Nowhere did he say that we need to wait until the entitlements can’t be paid out. He simply says that it is not something that needs to be addressed immediately given unemployment as a more pressing problem. Krugman may be right or wrong, but how does someone get taken seriously when they make silly oversimplifications?
Watching Krugman’s appearance though made me think that is important to make some major distinctions when discussing the debt issue. Future entitlement spending problems and the US debt are related issues, but are not the same. It is important to separate them, because it seems like the average person may think that unless we cut spending on entitlements our economy is going to tank, when in fact the situation is more complex. There is an issue of the sustainability of entitlement spending related to an increase in the size of the population dependent on Social Security and Medicare/Medicaid. This issue is about whether or not the government will be able to fund those programs.