Economy arguments not adequately researched
As a constant reader of Professor Krugman’s New York Times articles and his blog, I was appalled to read that Mr. Simon believes that Krugman, the winner of the 2008 Nobel Prize in Economics, has ever said that deficits don’t matter ( Chronicle, June 4, 2010, p. 8). Krugman has never said such a thing, and I challenge Mr. Simon to provide a citation to back up his belief.
What Krugman has said is that the Obama stimulus was about half as much as needed, with the result that the recovery has been very weak and the unemployment level is much higher than it should be. Dr. Krugman does agree that there is a long run deficit problem but argues that a more vigorous economic recovery now would help us deal better with the deficit in the longer run.
In contrast to Mr. Simon, Dr. Krugman has carefully pointed out that we are not like Greece, Portugal, Spain or Italy because we are not tied down by all being on the Euro. None of these countries has their own currency so cannot, therefore, deflate their way to increased exports, reduced imports and eventual recovery. Our national debt is not even at the historic high level.
It is also untrue that “For decades we have been paying interest only.” Mr Simon has apparently forgotten that President Clinton was running budget surpluses until President Bush came along and pushed through tax cuts and paid for the Iraq War by borrowing.
It is unfortunate that Mr. Simon has decided to engage in economic arguments when it is clear that in criticizing Paul Krugman he has not really read Krugman’s writings on these topics.