| | This overall argument -- that government didn't spend enough -- was used by Keynesians to explain the long, slow, drawn-out "recovery" from the Great Depression.
If you look at Merlin's St. Louis Fed link and compare and contrast the bracketed, 10-year slopes of spending from 1950 to today (also works with the state and local graph), then you see that every 10-year section involves a slope increase. That a geometric progression where, eventually, spending would reach infinity (if it weren't for national bankruptcy).
Of note is that spending was relatively flat in the 1950's (when huge interstate highway projects were underway). If spending from 1950 to today has increased, say, 100-fold, but population is nowhere near 100-fold larger, then spending per capita is much larger today. If spending per capita is much larger today and we still have a recession, then how can these dim-wits keep saying we need to spend more in order to offset the "fact" that we don't spend more?
Apparently, a slope increase in spending rises (one outpacing population growth), isn't an instance of increased spending. One wonders exactly what amount of new spending would actually get categorized by them as a true, bonafide increase in spending. A 25% increase? A 50% increase? A 100% increase? A 200% increase? A 1000% increase? A 10,000% increase?
What they do wrong is to look a few years back in order to see what kind of increase is "normal". This is the existentialist, hypothetico-deductive method -- where "normal" is assumed to be "recent, local, and usual" and deviations are checked against the unquestioned standard of the much-hallowed recent, local, and usual. Note: This is how animals think. The progressive (social?) science principle: The Precautionary Principle does the same thing.
It's like these 2 methods were designed for those who "think" in only concrete-bound terms (those who "think" like animals).
Ed
p.s. If I could debate Krugman, I would tell him that he thinks like an animal -- but I don't foresee the debate going well after that.
(Edited by Ed Thompson on 2/19, 7:50am)
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What’s extraordinary about all this is that stimulus can’t have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending.
