Tuesday, October 12, 2010

Who is fooling who?

In a column titled Obama's Huge Expansion of government?  It's a myth.  for the Sacramento Bee this morning Paul Krugman commented "Here's the narrative you hear everywhere: President Barack Obama has presided over a huge expansion of government, but unemployment has remained high. And this proves that government spending can't create jobs. Here's what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: We never had the kind of fiscal expansion that might have created the millions of jobs we need."

Krugman seems in a drug induced trance.  Unemployment nationally remains close to 10%.  Growth is puny.  And here is the clincher - from the Congressional Budget Office but via the WSJ - for the first two years of the Obama administration spending is up 21.4% - in this inflationary environment (even given the increases in Unemployment Benefits - which most economists have concluded,including the three who won the Nobel yesterday, that the extensions probably slow getting people back to work).  From my perspective the myth is that Krugman cannot seem to read a budget.

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