I received an interesting email the other day on debating Paul Krugman. I did a search on the topic and found a post with that exact name: How to debate Paul Krugman
Paul Krugman is the high priest of Keynesianism and modern interventionism, of economic improvement through inflation and budget deficits. As such he is bête noir among us libertarians and Austrian School economists. What makes him so annoying is his unquestioning, reflexive and almost childlike enthusiasm for state intervention, even in the face of its obvious failure, and his apparent unwillingness to probe any deeper into the real causes of our present economic problems or to show any willingness to investigate the effectiveness or ineffectiveness of his particular medicine. His Keynesian convictions are presented as articles of faith that no intelligent person can seriously question. A Krugmanesque argument is always built on a number of assumptions that are beyond doubt: ….
The above article goes on and on. Moreover, it appears to be 100% accurate. Unfortunately, it’s not the correct way to debate Paul Krugman at all.
Economist Hans Hermann-Hoppe explains the Right Way To Debate Paul Krugman in the following video.
The video is a mere 63 seconds long. Here is the key snip.
“It is very important in replies to people like Paul Krugman, that we don’t get involved in technical details. Ask some questions almost like a child. Explain to me how increases in paper pieces can possibly make a society richer. If that were the case, explain to me why is there still poverty in the world? Isn’t every central bank in the world capable of printing as much paper as they want? I am sure the guy cannot answer this type of question. Nobody can answer this type of question. We always get bogged down in technical details of his argument instead of always repeating this question: Please explain to me how a piece of paper can make society richer.”
Would that work?
Krugman would respond with incomprehensible gibberish “for wonks only” as well as typical Keynesian nonsense about how paying people to dig holes and other people to fill them up would start a chain reaction of growth.
A child would see the answer was preposterous, but not a trained economist, politician, or brainwashed academic. Paul Krugman, keynesian economists in general, politicians wanting a free lunch, and most academics are all incurable.
Nonetheless, Hans Hermann-Hoppe’s answer is indeed the correct one. By asking questions a child will understand, some non-brainwashed people will see Keynesian and Monetary stimulus for what they really are: economic stupidity.
Debt Grows at Astonishing Rate Even in Texas; A Roadmap to Better; “It’s Your Money”; Infinite Amortization Periods
“It’s Your Money”
Susan Combs, Texas Comptroller of Public Accounts says “Texas, It’s Your Money”.
At the Comptroller’s office, we’ve long championed the importance of transparency — giving the Texans we serve the information they need to make informed decisions and hold their government officials accountable.
That’s why our office launched the Texas, It’s Your Money series of reports, which spotlights issues that hit Texans in their wallets: local taxes, government debt, education debt and public pension obligations. We’re committed to keeping the state’s books open, accessible and understandable for our citizens.
A Roadmap to Better
With that introduction lets dig deeper into one of the reports “A Roadmap to Better“
click on any chart for sharper image
Sales Taxes and Property Taxes
Since 1993, special purpose districts that levy sales tax have increased by more than 1,900 percent, which means that more entities are taxing you. In that same time period, the number of special purpose districts that levy property tax has grown by more than 45 percent, with the creation of more than 500 new districts of this type.
While local sales taxes increased by almost 170 percent from 1993 to 2011, property taxes grew by 188 percent from 1992 to 2010. Compare that to slightly more than 120 percent growth in combined population and inflation during those years.
Our local governments more than doubled their debt load in the last decade, amassing more than $7,500 in debt for every man, woman and child in the state. Between 2001 and 2011, the outstanding debt of Texas local governments rose more than twice as fast as inflation and population growth rates combined.
Total Local Outstanding Debt
Local Debt – Where We Fall Short
New debt often is approved by a small percentage of voters, who must make vital decisions about new debt with little information about its implications. And a large share of local debt — totaling $12.7 billion since 2005 — is issued through “certificates of obligation,” generally, without any voter approval.
Combined State and Local Debt
How Texas Can Do Better
You have a right to a full and complete disclosure of public debt. All government
entities should reveal all debt obligations on a public website, including the debt’s original stated purpose, the total amount of debt authorized, the issued and unissued amounts of authorized debt, spent and unspent amounts of issued debt and the per capita debt burden on taxpayers. Any ballot for new debt should be accompanied by a similar
You have a right to approve debt issued in your name. Texas should significantly narrow public governments’ authority to issue debt without voter approval, and revise the petition process to make it easier for taxpayers to compel a public vote on proposed debt.
In fiscal 2011, our public school debt was $63.6 billion, or $13,530 for every Texas student in a school district carrying debt. And while state college and university debt is lower, at $12.5 billion, that debt rose nearly eight times faster than enrollment in the last decade.
College Debt vs Enrollment
The bulk of Texas’ education debt supports the construction or renovation of school facilities. Yet Texas has no centralized source for information on current public school facilities, such as total square footage, square footage per student and total cost. To obtain such information, every district must be contacted individually. Construction costs also are not reported to any single entity, making it almost impossible to identify unreasonable costs on individual projects.
In addition—as with other debt—new debt often is approved by a small percentage of voters. It also is difficult for taxpayers to learn the full dimensions of debt in their area.
How Texas Can Do Better
You have a right to full and complete information on education debt. Every Texas school district should disclose on its website the cost and details of all construction and renovation projects, including actual square footage, total cost per student, total cost per square foot and square footage per student. Each district should also post an online inventory of all existing facilities, detailing available square footage, total student capacity and current student enrollment for each campus.
All ballots for new education debt should reveal all current and proposed debt obligations, including the amount of outstanding debt, existing debt service, amount of new debt and the average length of proposed debt obligations.
Too little public information on public pension finances is readily available. Many plans do not report their actual investment returns to the state’s Pension Review Board.
Several of the state’s largest pension plans also have “infinite amortization periods,” meaning that they can never eliminate their unfunded liabilities as currently structured.
Texas public pension plans cover 2.3 million active and retired members. As with most other investments globally, Texas public pension program earnings fell during the recent recession. Although plan assets have rebounded since 2010, overall they are still below pre-recession levels.
Will Work to Pay Debt
The following image shows precisely what the current Ponzi scheme looks like.
The number of workers is shrinking dramatically compared to the number of retirees collecting Social Security or disability checks. Meanwhile state and local taxing bodies want still more debt and forever increasing taxes to keep the Ponzi scheme going longer.
This state of insanity is frequently described as being “Progressive“.
Instead, I support the common sense proposals of Susan Combs, Texas Comptroller of Public Accounts.
Mike “Mish” Shedlock