May 1, 2013 at 7:06 AM
Why the 1 percent prefers austerity
If the government has to borrow, there will be no gain
Paul Krugman’s pessimistic view of austerity would be laughable if it weren’t so pathetic in its attempts to mislead the public about government spending [“The elite’s preference for austerity,” Opinion, April 27].
Keynesian economic theory was tried exclusively in the Obama administration’s first term to no avail. The American Enterprise Institute estimates the administration used $4 trillion in stimulus spending with nothing to show for it but bankrupt solar-energy companies, distorted used-car prices (cash for clunkers), a $16 trillion national debt, a paltry 2 percent economic growth, and 22 million unemployed Americans.
If the government has to borrow from the public to finance its stimulus efforts, then there is no net gain to the economy as we are witnessing today.
So why does Krugman continue to peddle an economic theory that has proved false in reality over and over again? My guess is the means accomplishes his political end of a highly centralized economy run by our benevolent government.
This theory that he is so personally invested in will makes us all poorer, and not just the wealthy 1 percent that he is so cynical about. Rather, we should be focusing on more growth-oriented policies for the private sector, which have been consistently proved in the past, but untried during the last four years.
Eric Aplin, Snohomish
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