During the December 4 edition of the PBS NewsHour, anchor Gwen Ifill decided to give a lofty eight minute and forty second interview to Obama cheerleader and Nobel laureate Paul Krugman so he can try to convince us that the fiscal cliff isn’t that big of a deal. Of course, in his estimation, Democratic proposals for higher taxes and higher spending were serious, while Republican alternatives to tackle the deficit were trivial. In fact, according to Krugman, “Obama is actually very serious in the real sense. It's just the notion he hasn't done anything on entitlement reform is totally unfair. He's done more than anyone has ever done before.”
And that’s why he needs $1.6 trillion dollars in tax hikes and $50 billion in additional stimulus spending to be "serious" about reining in deficit spending?!
A skeptical journalist would raise that point, but of course Ifill didn't. Instead the taxpayer-subsidized news anchor allowed Krugman to insistthat Republican alternatives to reform entitlement spending -- which is in the tens of trillions of dollars and unsustaintable without substantial reform – is “just a smokescreen.” He further derided conservative alternatives to solving the debt crisis as “a Potemkin plan. There's nothing real there.”
Krugman tried to have it both ways by insisting the GOP plan would harm "vulnerable" people when also insisting that the cost savings from changes to Social Security would be negligible:
GWEN IFILL: Well, talk about one part of the Republican, if you want to put air quotes around it, plan, as you replied, and that's the idea of raising the eligibility age for Medicare. Why isn't that something that might actually be a big first step?
PAUL KRUGMAN: Well, first of all, it's very small amounts of money.
The Congressional Budget Office put it at a little over $100 billion over 10 years, which is trivial in all this stuff. It doesn't save very much money; 65- and 66-year-olds are young seniors, so they don't cost a lot actually. They don't have the health problems.
So, even kicking them off the program doesn't save you very much money. It doesn't bend the cost curve. It makes almost no difference to the financial outlook. But it's cruel. It's taking a lot of people who are counting on being able to have finally guaranteed insurance and kicking them out into a -- we don't know whether ObamaCare will -- how thoroughly it will be implemented. It's just -- it's -- it's exactly what I was saying, that it sounds serious because it's hurting vulnerable people.
But if you actually look at the dollars and cents, it's not serious at all. And, of course, it will cost people much more. You're talking about saving -- for every dollar that the government says, you're imposing $2 of costs on the people who are thrown off the program.Story Continues Below Ad ↓
Concerning the impending tax hikes from our fall off the fiscal cliff, Krugman accused the GOP of "government by blackmail," even though President Obama need only agree to extending the tax cuts to all Americans to avert diving off the deep end:
GWEN IFILL: The president has also proposed something that John Boehner calls silliness -- or, I should say, Secretary Geithner actually did -- which is taking the idea of the debt ceiling off of Congress' plate, something which members of Congress seem to think at least is a nonstarter. What is the value in putting that out there?
PAUL KRUGMAN: Well, again, it needs to be said. This is crazy.
Where do spending and tax revenue come from? They come from bills voted by Congress. So, the way that the debt ceiling works is that Congress can actually vote to not tax enough to pay for the spending it proposes, and then it can refuse to allow the government to borrow the money to make up the difference between its own spending bills and its own tax bills. This is crazy. This is a license for continual irresponsibility.
And, of course, we're heading for -- the Republicans are attempting to do government by blackmail. Don't -- give us what we want, or we will tank the economy. Nice little economy you have got here. Shame if something were to happen to it. And we can't run on that system. So we have to -- this needs to be taken off the table.
Yes, because more than a trillion dollars worth of tax hikes, and endless regulations, won’t be detrimental to the economy. Yeah, that's sound economic theory!