Despite his awful track record and penchant for making stuff up when it fits his agenda, New York Times columnist Paul Krugman is one of the liberal media's most beloved economic darlings.
That's why it was quite a shock to see former Newsweek editor Evan Thomas slam him on PBS's Inside Washington Friday (video follows with transcript and commentary):
EVAN THOMAS: I’m a boring deficit hawk on this. I say the same thing over and over again. My latest hobby horse is Paul Krugman. Paul Krugman has convinced a lot of my liberal friends that It’s okay to kick this down the, kick the can down the road. Oh, he had a column in the New York Times on Friday morning.
GORDON PETERSON, HOST: He actually used those words.
THOMAS: Good, kick it down the road. Terrible idea. It courts all sorts of disasters. Sudden interest rate spikes, and it hasn’t happened yet, but that doesn’t, it can happen overnight. When the markets turn sour on you, it can happen very fast. It takes a long time to fix these problems. We got to start on it now. Sequestration is a very crude, ugly tool, but if it actually had the effect of making people get serious about entitlement reforms and tax reform, it wouldn’t be so bad.
For those that missed it, Krugman published "Kick That Can" at the Times Friday:
While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road. [...]
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders. [...]
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
For the record, Thomas wasn't the only media member displeased with Krugman's can kicking.
U.S. News and World Report's Mary Kate Cary also took issue Friday:
Krugman arrogantly says it's "not urgent" that we do anything. But the CBO outlines the serious negative consequences of taking his advice and doing nothing: As interest rates rise again with a rising economy, federal spending on interest payments will go up as well. Increased federal borrowing to pay the interest will reduce national saving, which means there will be less capital for investing and total wages will be lower.
Fewer people will be able to start businesses, and workers, especially young people—already hit hard by high unemployment rates and above-market interest rates on their federal student loans—will make less money and pay higher taxes. Twenty- and 30-somethings will have to wait longer to buy their first house or afford their first car or start a retirement account. Organizations like TheCanKicksBack.org are making young people aware that doing what Krugman suggests, meaning kicking the can down the road, which he says is the "responsible thing" to do, will be nothing short of a financial disaster for them. I'd like Krugman to tell my two teenage daughters that a future like that is "not distinctly alarming." [...]
It's Paul Krugman who is out of touch with the very real economic concerns of most working Americans. The "severe" damage he predicts from reining in government spending pales in comparison to the looming economic crisis that awaits us if we simply do nothing. Maybe his advice is what needs to be kicked down the road.
Readers likely won't find it surprising that I agree with Cary and Thomas.
We've been kicking budget balancing and entitlement reform down the road most of my life.
If the Medicare and Social Security programs that I've been paying into for going on five decades are going to return me anything in my retirement, they must be reformed now.
People like Krugman and his liberal media colleagues prevented Social Security reform in 2005. It's now eight years later and he wants to continue kicking the can.
As Cary said, maybe his advice is what needs to be kicked down the road.
