In The New York Times, Nobel prize winner Paul Krugman writes theTwinkie Manifesto, 11/18/12.
In the article Krugman noted how we had strong economic growth in the 1950’s even with much higher tax rates and much stronger trade unions.
But a part of the truth can be more misleading than all of a lie, and there is much more to an economy than the tax rates and union participation rate.
Randall Hoven reminds us of the other characteristics of the 1950s that Krugman conveniently chose to ignore in Krugman’s Howdy Doody Time in American Thinker, 11/29/12.
But if we compare the 1950s to later years, there are a few other parameters to examine. The top individual tax rate does not an economy make.
Over the decade of 1950-59, the federal government spent 17.6% of Gross Domestic Product. In President Obama’s first term it spent 24.4% of GDP. That is a difference of $926 billion in today’s dollars.
Funny, I didn’t hear Krugman calling for the federal government to cut spending by nearly a trillion dollars per year. In fact, he argues for the exact opposite.
What did the federal government of the 1950s spend that money on? In the 1950s, the federal government spent 58% of its budget on “national defense.” In the last four years: 19%. In the 1950s, the federal government spent 24% of its budget on “human resources.” In the last four years: 66%.
Funny, I didn’t hear Krugman arguing for tripling the defense budget. Nor did I hear him arguing for cutting “human resources” spending by two-thirds.
Over the 1950s, gross federal debt was cut from 93% of GDP to 59%. In just the last four years, it has increased from 70% to 105% of GDP. In the 1950s we shrank the debt, and now we grow it — to the highest level since 1947.
Funny, I don’t hear Krugman calling for the federal government to cut its debt. In fact, he argues for the exact opposite. He calls debt a “phantom menace.”
Here are a few current federal programs and departments that did not exist in the 1950s.
• National Endowment for the Arts.
• National Endowment for the Humanities.
• Dept. of Housing and Urban Development.
• Dept. of Transportation.
• Drug Czar (or any other “czars,” for that matter).
• Environmental Protection Agency.
• Occupational Safety and Health Administration.
• Dept. of Education.
• Dept. of Energy.
• Dept. of Veterans Affairs.
• Dept. of Homeland Security.
Funny, I didn’t hear Krugman’s plea to eliminate any of these programs or departments.
From 1950 through 1959, the Federal Register averaged 10,703 pages of regulations. In 2011 it was 82,419 pages. In just the last 90 days, 5,769 new regulations were issued, with 923 more scheduled for the next 90 days.
Funny, I didn’t hear Krugman’s call for eliminating 90% of federal regulations.