Horror of horrors! Those nasty Republicans are at it again – holding President Obama “hostage” unless he agrees to their outrageous demands as a condition for their votes to raise the nation’s debt ceiling. At least, that’s what New York Times op-ed columnist and left-wing demagogue-economist Paul Krugman would have us believe in his latest slanderous attack on Republican budget-cutters.
In his op-ed column today entitled “America Held Hostage,” Krugman accuses the Republicans, who control only the House of Representatives, of blackmailing President Obama by threatening to throw the country into economic ruin unless they get their way on spending cuts.
Krugman uses his usual scaremongering tactics to warn about the “seriously bad consequences” if the debt ceiling isn’t raised. He warns:
For if we hit the debt ceiling, the government will be forced to stop paying roughly a third of its bills, because that’s the share of spending currently financed by borrowing. So will it stop sending out Social Security checks? Will it stop paying doctors and hospitals that treat Medicare patients? Will it stop paying the contractors supplying fuel and munitions to our military? Or will it stop paying interest on the debt?
Krugman paints a Depression-era picture of
nervous seniors…wondering how to pay for rent and food
Nevertheless, Krugman urges President Obama to call the “extortionists’ bluff,” rather than give in on any spending cuts in the absence of major tax increases. Thus, if his warnings are to be believed, Krugman by his own admission is willing to risk letting seniors starve and live in the streets, Medicare patients to die due to lack of medical care and our soldiers to fight without bullets, in order to score political points against the evil Republican “extortionists.”
But, to give the devil his due, I think Krugman knows in his heart of hearts that his dire warnings of Armageddon if the debt ceiling is not raised on time are nonsense. He must know that we can still pay our interest obligations and debts as they come due, whether or not the debt ceiling is immediately increased. Thus, he appears willing to mislead his readers about the “seriously bad consequences” of a failure to raise the debt ceiling right on time while urging Obama to play chicken with the Republicans whom he demonizes with childish epithets.
Krugman likes to say that
the federal government is basically an insurance company with an army
But the truth is there are plenty of discretionary areas in the federal budget, outside of “insurance” and defense, that can be suspended without sacrificing our seniors, national defense, or the most vulnerable members of our society.
Federal education and agriculture subsidies come to mind. The discretionary portion of the federal education budget for fiscal year 2011 alone is $68.5 billion. Discretionary spending for agriculture is approximately $24 billion. Thus, nearly $100 billion of spending could be immediately suspended from just the Education and Agriculture departments alone, if the debt ceiling is not raised exactly on time, with no impact on seniors, the most vulnerable or national defense.
What Krugman refuses to acknowledge is the financial Armageddon that is certain to occur if we continue along the spending trajectory set by the Obama administration.
If the United States continues to spend with reckless abandon, we will go bankrupt. It is common sense that raising the debt limit even more, without moving the nation back to the pre-economic crisis spending levels of 2008, is like giving more whiskey to an alcoholic.
Krugman believes that we can simply print our way out of the debt mess, even if that means inflation. In another article he wrote in yesterday’s New York Times Magazine, Krugman said that the inflationary consequences to the rest of the world of our printing too much money are “not our problem, fellas.”
Aside from the xenophobic implications of Krugman’s flippant remark, he is wrong that printing too much money is not our problem. Trying to solve the debt problem and to create jobs through flooding the markets with more paper money is just setting us up for more economic disasters. A principal reason has to do with the effect of devaluation of the dollar resulting from printing more money on the price of dollar-denominated oil.
Krugman argues that what’s pushing up raw material prices, including oil, is the rapidly growing demand from the emerging world. That is only partly true. Supply disruptions and artificial constraints imposed by the Obama administration on domestic drilling also contribute to the problem. So do speculators. But the single most important reason for the spike in oil prices is the devaluation of the dollar, to which oil prices are pegged, as demonstrated by the following chart:
Paul Krugman is so blinded by his left-wing wealth redistributionist ideology that he is willing to throw facts and disciplined economic analysis aside to make his political points. His articles are turning into demonizing demagoguery not worthy of an Economics Nobel Laureate.
Joseph Klein is the author of a recent book entitled Lethal Engagement: Barack Hussein Obama, the United Nations and Radical Islam.