Liberal New York Times economist Paul Krugman needed to dip into the graveyard of famous newspaper headlines to spit childish hyperbole at Senate Majority Leader Mitch McConnell (R-KY).
Krugman went #PeakWoke at McConnell’s suggestion that states should file for bankruptcy.
Ironic that the guy who wrote the Keynesian book “Arguing with Zombies: Economic, Politics, and the Fight for a Better Future,” would attempt to revive a zombie headline from roughly 45 years ago to continue proving his lefty bias.
Krugman’s piece headlined, “McConnell to Every State: Drop Dead,” is a play on an old 1970s New York Daily News headline lambasting then-president Gerald Ford. That headline read, “Ford to City: Drop Dead.” Both Krugman’s op-ed and the Daily News story harangued elected GOP officials for bucking the idea of using tax dollars to bail out states and New York City respectively.
Krugman’s piece went for the jugular. “Unfortunately, it’s looking increasingly likely that tens of millions of Americans will in fact suffer extreme hardship and that there will be devastating cuts in services. Why? The answer mainly boils down to two words: Mitch McConnell,” he wrote.
Krugman even said blocking federal aid was “vile” and “hypocritical.”
According to Krugman,“this necessary slump doesn’t have to be accompanied by severe financial hardship. We have the resources to ensure that every American has enough to eat, that people don’t lose health insurance, that they don’t lose their homes because they can’t pay rent or mortgage fees.”
His solution? Krugman said we need to spend more. Lots more: “The solution is federal aid. When I say that we have the resources to avoid severe financial hardship, I’m referring to the federal government, which can borrow vast sums very cheaply. In fact, the interest rate on inflation-protected bonds, which measure real borrowing costs, is minus 0.43 percent.” [Emphasis added.]
But this nutty line of reasoning fails the logic test. “Every dollar borrowed causes damage down the road from the resulting higher taxes extracted from the private sector,” Director of Tax Policy Studies at The CATO Institute Chris Edwards wrote April 21. “Furthermore, interest rates may spike, which will increase federal borrowing costs as accumulated debt is rolled over.”
Edwards estimated that debt accumulated from the crisis will be a whopping $6 trillion. The United States’ national debt is now well over $24.6 trillion, which translates to well over $198,000 per taxpayer.
Krugman went from attacking McConnell’s “stupidity” to attacking his “hypocrisy” using a false equivalency:
At one level, it’s really something to see a man who helped ram through a giant tax cut for corporations — which they mainly used to buy back their own stock — now pretend to be deeply concerned about borrowing money to help states facing a fiscal crisis that isn’t their fault.
The Trump tax cut helped federal tax revenue soar to a “record $806.5 billion in the first three months of fiscal 2020,” according to CNBC contributor Jake Novak. “These results are the strongest argument that tax cuts do indeed grow the economy in a way that widens the tax base and ends up bringing in more money to Uncle Sam in the end.”
Krugman concluded his rant by pretending to be a psychic, purporting to have read into McConnell’s thinking to snap at the GOP:
Of course, McConnell has an agenda here: He’s hoping to use the pandemic to force afflicted states to shrink their governments. We can only hope both that this shameless exploitation of tragedy fails and that McConnell and his allies pay a heavy political price.