Static from Paul Krugman

Paul Krugman of the New York Times writes today about the "ludicrous and cruel" budget proposal from paul Ryan of the GOP. According to Krugman, the proposal with its enormous cuts in spending will result in bigger deficits and more debt than the current budget projections. He further says that the ryan proposal is just a ploy to allow for more tax cuts for the rich.

Give me a break! Krugman actually won a nobel prize in economics, so I am sure that he understands the difference between static and dynamic scoring. Simply put, static scoring assumes that changes in spending and taxes have no effect on the economy. Dynamic scoring looks not only at expenditure and tax changes, but includes the effect that these will have. For example, the social security tax reduction in effect this year was pushed through at the end of 2010 by the GOP; they got it as a concession from Obama as part of the deal on avoiding tax increases. That payroll tax reduction is responsible for keeping the US economy from having gone back into recession as a result of the soaring energy costs this year. krugman would look at the tax cut in a static fashion and say that the government lost several hundred billion dollars. A rational person, however, would look at the real world. Using a dynamic evaluation of the tax cut, it has resulted in higher government revenues since it has kept the economy growing rather than contracting in these perilous times.

The truth is that Krugman has an agenda that he demonstrates every time he writes a column. Krugman wants a bigger government -- that's it, that's all he wants! Only tax increases are good; tax cuts are dangerous and counterproductive. He is not talking actual economics; rather, he is engaging in ideological economics. Krugman is like those old Marxists who knew for sure that capitalism would wither away in the face of the "glorious" Communist system in the Soviet Union. Their ideologies all supported their theories even if the facts did not. It is hard to imagine that anyone actually deserved the Nobel prize less than President Obama, but it seems clear that Krugman fits that description.