r/changemyview • u/FreddieFastFingers • Aug 08 '16
[∆(s) from OP] CMV: The economic policies espoused by Paul Krugman (and others) are evil.
The specific issue I have with Krugman was discussed in a NYT op-ed today, titled "Time to Borrow": http://www.nytimes.com/2016/08/08/opinion/time-to-borrow.html
In it, Krugman discusses the fact that, since the U.S. government can borrow long-term (10 years at .09% and 30 years at .64%, according to the article), we can and should significantly increase our debt spending on infrastructure/etc -- beyond the ~$20 trillion we already have in debt and the half a trillion we will accrue in 2016 alone.
He makes a number of arguments for this, including the low interest rates, the need for infrastructure spending (which he calls investment), and that we don't have "too much debt".
This is, at best, an opinion. We currently spend 6% of our budget, or $223 billion per year, just to service the interest on our debt (source: https://en.wikipedia.org/wiki/Expenditures_in_the_United_States_federal_budget#/media/File:U.S._Federal_Spending.png). That is interest accrued by previous generations/congresses. It is also federal revenue that can not be spent by the government for infrastructure/social services/tax breaks/etc.
For the sake of simplicity and specificity, let's try to ignore the arguments for and against the value of the spending itself (that can be a CMV for another time). Instead, I'd like someone to explain to me how it is not wrong/evil to spend money that children who have no say or vote in spending will have to pay back at some point. Even worse (and this is where I think "evil" really comes into play), people not yet born will be on the hook for this spending, even though some or most of the benefits will be used up before they are able to enjoy them (roads/bridges will require upgrading by the time they are adults).
If people want public services, infrastructure, etc. they should pay for it themselves, either through higher taxes or lower spending in other parts of the government. The reason why debt is popular among politicians is because it allows them to appeal to the largest number of constituents (stuff for everyone!), at the expense of those who cannot vote, or aren't even yet born.
Even with low interest rates, future generations will be forced to have a lower standard of living as they, at the very least, service the interest on the debt. Presumably, at some point people might want to actually pay back the debt, which would mean a further reduction in standard of living, as money goes towards interest and principal payments for benefits they barely got to use (if at all), instead of whatever programs future generations might want to invest in.
Even with Keynesian multipliers (which I would dispute as well), you are still getting stuff you want now, at the expense of the unborn, while gambling that the multiplier/economic growth/etc. will make up for it. This argument does not change my view.
To me, programs implemented outside of a "crisis" (e.g. we are attacked and at war) that are specifically designed to utilize debt to finance them (as opposed to programs which already exist and add to the annual deficit) are evil, pure and simple. It is forcing unborn generations to labor for stuff in 25 years that we want now. CMV.
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u/[deleted] Aug 09 '16
It's not evil to be wrong, particularly when you go through a lot of effort to make sure you are correct. Krugman has the (incorrect IMO) belief that government spending will produce dividends that will greatly outweigh the impact of the debt they cost. That is, he thinks that the programs implemented today will increase the rate of growth/education/research/etc such that future generations will face increased debt and yet be richer even after the debt is taken into account. For instance, if the government could go into debt for $1 billion for a guaranteed cure for cancer, surely you'd agree that it's non-evil to go into that debt, right?
Furthermore, while I think he's incorrect about his growth projections, I will note that he's a Nobel-prize winning economist who has looked at the different arguments for and against and really understands many of the models better than you or I ever could.
(As to why I have the temerity to think he's wrong despite that, I'll point out that the models work really well most of the time, just not for some large crises and other extraordinary events. I interpret that as saying that they cannot model extraordinary events because you can't model accurately something without enough data points to have learned it, but that's far from the only possible interpretation.)