A definitive Economic Debate

[cthulu2016]

This clip is amazing. Paul Krugman in the UK debating two dour, bitter, self-satisfied right-wing cranks who are utterly convinced that their slogans trump his equations. It is a definitive exchange, which the cranks managing to hit every RW talking point without any need for evidence.

The most clarifying moment is when one of the cranks says that Krugman must acknowledge the immense moral dimension of government debt, burdening young people in the future. Krugman replies that what burdens young people's future is graduating college and not being able to get a job and that by couching an economic discussion of optimal fiscal policy in moral terms the crank has just confirmed for him that austerity isn't an economic theory, but just a way to seek the ideological goal of smaller government.

Good Stuff.

Takeaway quote (paraphrased from memory): "An economy is not a household. In an economy your spending is my income. My spending is your income. Government cannot cut back at the same time the private sector is cutting back."

http://www.bbc.co.uk/news/business-18281669

[cbrer]

1. Great Video. Ulterior motive laid bare

Both of the (obviously) wealthy debate opponents were for lower taxes, and smaller government. Even in the face of demonstrable failure of those policies within the timeframe of economic downturn. To hell with the population, they should suffer to pay off the debt, at a time when the government should be acting to smooth economic waves.

And all quite civilized in a British sense... Not much like America's loud and rowdy stuff.

[cthulu2016]

2. Yes, without the theological venom the right-wing ideas are

even more starkly exposed for what they are.

Those two clowns are so self-satisfied thy could never figure out how silly the seem.

American conservatives are ahead of the curve... they have figured out that calm, reasoned debate is not their friend.

[spooky3]

18. + 1

Did you notice also how surprised they seem when Krugman challenged their assertions with factual evidence? They had absolutely no response, such as "I've seen those data and you're wrong because..." They simply spout ideology as if it is factual and clearly haven't studied the subject at all.

[Atypical Liberal]

3. I don't understand why this stuff is so hard to debate.

I really don't.

Like Krugman said - it's all about demand. Demand, demand, demand. If there is no demand for goods, it doesn't matter what kinds of tax incentives or deregulations you put in place, there will be no jobs created. Period. No one is going to hire people when there is no demand for the work that that worker could do.

Governments function like a capacitor in an electrical system, or, as Krugman suggested, a flywheel in a mechanical system. They store energy, or, in this case, money. And when the system lags, you can dump that energy into the system, temporarily, to help keep things stable.

If you cut private AND public spending simultaneously, then demand just absolutely plummets. This is exactly what happened in the Great Depression.

Krugman is also right that this is really just a cover for a moral maneuver to cut the size of government. The morality that these two are pushing is that everyone should sink or swim on their own with no government flywheel at all.

[laundry_queen]

4. Taking a break from my macro econ course to agree

In fact, the reason there is macroeconomics is because of the observations Keynes made during the Great Depression.

Just take a look at the circular flow of expenditure and income to see how a cut back on expenditure from both households and government is total disaster. If firms pay less for labour, and households must cut back on spending, without government spending to make up the difference it's no longer a circle - it's a spiral downwards.

[1-Old-Man]

10. The reason it is so hard to debate, in fact impossible to debate, is ...

Sorry, I wanted to put it all in the title. The reason debate is impossible is because the right does not accept evidence. They put their beliefs on the same level as facts. So no surveys, no polls, no collected data, no recognized trends, nothing will dissuade them from their beliefs.

[NRaleighLiberal]

14. Absolutely. Their belief system is like teflon - facts just roll off.

And welcome to DU!

[spooky3]

19. Agree. (n/t)

[DanTex]

11. I agree with you 100%!

How about that!

[girl gone mad]

5. Krugman sounding more like an MMTer by the day.

Guess we finally got to him.

BTW, Krugman did acknowledge a few months ago that this was his favorite MMT tutorial:

http://pragcap.com/understand-the-modern-monetary-system/understanding-modern-monetary-system

Also, the argument that young people are burdened by a slack in productive capacity and employment weakness, not by federal debts is an argument MMTers have made for decades.

http://bilbo.economicoutlook.net/blog/?p=2481

[cbrer]

6. Thanks for the links

But why all the editing?

[DanTex]

13. I don't see anything "MMTish" about this

Krugman has always been clear that government debts can be a problem, but in this specific situation they are a much smaller problem than the lack of demand, as evidenced by the fact that unemployment is very high but interest rates are very low. This is not an MMT argument byt a Keynesian one.

[Iwillnevergiveup]

7. K&R

"An economy is not a household." Yup, that about sums it up. Keep fighting on, sir.

[cachukis]

8. Fabulous

[Waiting For Everyman]

9. Now if he could clone himself about a thousand times...

We need more of him -- people who "get it" and have the position to say it.

[Egalitarian Thug]

12. K&R, going to watch it this afternoon. n/t

[Douglas Carpenter]

15. knr

[bleever]

16. Thank you for posting this.

Great clip.

[Stevepol]

17. Excellent!!

If there were only a thousand clones of Krugman to flood the airwaves with this, in 20 years it might get through to a few of these people who only think of their own bank accounts and not of the PUBLIC SECTOR, which is all the bank accounts in the country. But I doubt it. It's really ideology as he says in the interview that drives these arguments for austerity, the desire to expand the power of the moneyed few at the expense of the bankrupt many.

[Yavin4]

20. In My 26 Year Career, I've Worked for Extremely Wealthy Lawyers

I've worked when taxes were low and high, and when there was massive deregulation. The one factor that always determined whether I had a job or not or how much I got paid was DEMAND. If the firms has big cases, then I would be hired and paid. When the big cases went away, so did I.

The lawyers that I worked for are the prime beneficiaries of any tax cuts, but they would not hire anyone nor raise anyone's pay if there wasn't DEMAND.

[Egalitarian Thug]

21. I suppose it is somewhat heartening to see that, though better educated and far better spoken,

British RW wackos are just as stupid as ours. It's amusing, until you realize that these idiots are responsible for destroying the world, to watch their faces as they struggle to either grasp what Krugman is saying, or trying to think of some weakness in what he is saying.

It is remarkably like talking to the religiously insane, they have a belief that defines them and there is nothing that can be told or shown to them that will break through that brain fog.

[cthulu2016]

22. When she says we need to make it easier for college kids to start businesses...

That's such a jaw-dropping "let them eat cake" moment.

And when Krugman points out the absurdity of it she persists!

[Egalitarian Thug]

23. Exactly. I know that we have some areas like this on our side as well,

but I've never seen such absolute commitment to such bankrupt ideology on the "left".

I've had more than a couple of fights with those on this side over issues where emotions tend to trump facts (firearms is the easiest example for me), but if the debate goes on, eventually some meeting of minds is possible. I have never had that experience with a radical authoritarian.