Ihan mielenkiintoinen muutaman kuukauden vanha teksti, jossa Jeffrey Sachs kommentoi uusvasemmistolaisen Krugmanin mielipiteitä. Sachs itsekin on keynesiläinen.
Jeffrey Sachs: Professor Krugman and Crude Keynesianism
Nykyajan Keynesin fanipojat on keynesiläisempiä kuin Keynes itse. Sachsin mielestä myös velan määrällä on merkitystä. Krugman on samaa mieltä kuin jotkut täälläkin, että pääasia että rahaa tuhlataan, ihan sama onko kyseessä tarpeellinen ja järkevä kohde rahojen käytölle vai ei .
"First off, here is what I mean when I say that Krugman is a crude Keynesian: he takes a simplistic and inadequate version of the Keynesian economic approach as his guide for budget policy. Keynes himself was far subtler. In 1937, with British unemployment still around 10 percent, Keynes wrote: "But I believe that we are approaching, or have reached, the point where there is not much advantage in applying a further general stimulus at the centre."
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Unlike the Great Depression, which Krugman repeatedly uses as his reference point, U.S. profits are soaring. Unlike the Great Depression, the world economy is growing rather rapidly (3 to 4 percent per year) so that more rapid U.S. export growth is feasible. Unlike the Great Depression, vacancy rates are recovering even as unemployment is stuck. (Technically, the Beveridge Curve has shifted to the right.)
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Third, crude Keynesians like Krugman believe that we don't have to worry about the rising public debt for many years to come, perhaps well into the next decade. This is remarkably shortsighted. The public debt has already soared, from around 41 percent of GDP when Obama came into office to around 76 percent of GDP today (and with no lasting benefit to show for it). If Krugman had his way, and deficits were not restrained, the debt-GDP ratio would already be above 80 percent by now and would be rising rapidly towards 90 percent and above (as shown in the recent CBO alternative scenario).
Krugman now writes: "everyone repeat with me: there is no deficit problem." He says, in effect, that since the debt-GDP ratio is now likely to be stable at around 75%, we need not worry. But his claim is thoroughly misleading. The forecast of a stable debt-GDP ratio is precisely because Washington has rejected Prof. Krugman's advice. If DC instead followed his advice, the debt-GDP ratio would indeed already be significantly higher and would be rising rapidly.
It's true that we've not paid heavily so far for this rising debt burden because interest rates are historically low. Yet interest rates are likely to return to normal levels later this decade, and if and when that happens, debt service would then rise steeply, increasing by around 2 percent of GDP compared with 2012. Many people seem to believe that we can worry about rising interest rates when that happens, not now, but that is unsound advice. The build-up of debt will leave the budget and the economy highly vulnerable to the rise in interest rates when it occurs. The debt will be in place, and it will be too late to do much about it then.
According to the new CBO baseline, debt servicing within a decade is now on track to be around 3.3 percent of GDP, larger as of 2023 than the total of all non-defense discretionary spending and also all defense spending in that year! This high interest servicing cost will be the result of the large build-up of debt in recent years combined with the return of interest rates to historically normal levels. As interest service costs rise, vital public investments and other programs are likely to be shed. That's when we'll suffer the most severe fiscal consequences of our debt buildup of debt. Of course neither Prof. Krugman nor his followers seem to be much interested in looking ahead a few years.
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This approach is disastrous both politically and economically. Progressives like myself believe strongly in the potential role of public investments to address society's needs - whether for job skills, infrastructure, climate change, or other needs. Yet to mobilize the public's tax dollars for these purposes, it is vital for government to be a good steward of those tax dollars. To proclaim that spending is spending, waste notwithstanding, is remarkably destructive of the public's trust. It suggests that governments are indeed profligate stewards of the public's funds."
