Krugman claims to have been correct in calling for the failure of stimulus due to insufficient funds.
However, it is well known that no matter the amount of stimulus under consideration, Krugman will call for an ambiguous more. It is a wise gambit on his part, as stimulus generally results in extending contractions and when it fails he can fall back on "it wasn't enough" or "we never really tried a true stimulus". And if stimulus were to work, Krugman would still be correct because the Keynesian basis for his calculus would be verified.
Essentially, Krugman has set himself up as unverifiable. But what if his wild calls for massive stimulus spending were overtaken by even greater actual spending by government and economic growth still lagged?
Let's compare what Krugman seems to have called for via NPR:
Krugman is of the opinion that the proposed $800 billion-plus stimulus package is not large enough to have a meaningful impact. He says the administration should spend $1 trillion or more over two years.
... to the $13 trillion in stimulus spending PBS references which, of course, does not include the baseline of immeasurable "Brodian Stimulus" more commonly known as general government spending.
The myth is that the US never met the amounts of stimulus spending Krugman said we needed to work our way back toward prosperity. The reality is the we exceeded the Krugman call by a factor of between 10 to 15 and found even greater misery.
Despite Krugman's obvious desire to avoid set data points by which to measure the success or failure of his proscriptions, government spending outpaced even Krugman's wildest Keynesian desires and was found lacking.
Demand side solutions have failed.Keynes was wrong.
Krugman was wrong.
out
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