To prove my point about Krugman’s creativity, let’s just parse one two-sentence paragraph from the column Jeff cited in his article. Here’s what Krugman stated just as if it was factual in his first sentence:

“America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis.”

If that isn’t pure economic bull then how is Krugman to explain America’s budget deficits in 81 out of the last 90 years??? (http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf) Must we suppose that the other 81 budget deficits since 1930 were attributable to the Great Depression? And if the United States has been operating at a deficit in virtually every year since 1930, isn’t it about time S&P reduced its credit rating of such a deadbeat establishment? If Krugman was a real economist, relying on facts rather than his own fantasy scenarios, he would chastise S&P for not dropping the US rating to whatever letter S&P gives to a nation or corporation that is teetering on the verge of belly up.

In his next sentence, Krugman says this:

“And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste. ”

Naah, the credit-rating agencies aren’t that powerful that they could play a major role in causing any financial crisis. The major-role culprit responsible for the latest crisis was, as usual, the Federal Reserve, which, along with congress, esp., Barney Frank, and Fanny Mae and Freddie Mac inflated the housing bubble to the point of bursting in a vainglorious attempt to put every American in a house they couldn’t afford.

You know, it really doesn’t require any “comedic reverse-splitting-hairs method” (Is that anything like “reverse harem anime?) to trash Krugman. The easiest way to trash Krugman is to point out his simplistic, religious faith in government spending to cure all evils, and his consistent habit of either distorting the facts or creating his own “facts” out of whole cloth in support of his religious beliefs, a really strange religion that Ludwig von Mises wisely dubbed Statolatry. But speaking of things humorous, I find it very funny that so many professed atheist–along with a bunch of Christians, Jews and virtually every Muslim–are at heart Statolatrists, who worship at the alter of their Almighty State with all the fervor of religious fundamentalists.

Rating agencies have an extremely poor record analyzing sovereign debt — just look at JGB yields during the last 10+ years every time a rating agency downgraded their debt. Therefore, Jeff et al miss the picture by saying that S&P “dares to let out some slight be [sic] of truth”.

This may be too much for you to comprehend and it’s hilarious how Jeff tries to trash Krugman by a comedic reverse-splitting-hairs method.

So, in summary:
* Jeff is not very bright
* Neither are you

Come, come. Out with it. Did you own some of those mortgage-backed bonds that tanked because you relied on S&P’s phony ratings? Ho, ho. Or perhaps you work for one of the other rating services yourself and are really just blogging for dollars? Maybe Moody’s or Fitch?

Whatever. See if you can respond without persisting in your desperate attempts to change the subject, which, as I already pointed out to you, constitutes a clear admission that you know you made a stupid mistake but wont admit it. As long as you keep trying to shift the focus away from your faux pas, I’ll be happy to keep focusing on you and it like an owl focusing on a scurrying mouse.

And, please, cling to your guns and religion and keep to yourself for the betterment of the gene pool.

I appreciate your response. Unfortunately, I have to lump you in with Jeff. You see, I did read Jeff’s original post and that’s why I wrote what I wrote. Jeff seems to confuse the analogy (or complicate it more than necessary) so I’m afraid there’s nothing more I can add and I completely stand my original post assessing Jeff’s logic.

I don’t believe I changed the subject because you didn’t offer a counter argument (only directing me to re-read a flawed statement). However, I noticed the website you maintain and then realized I was dealing with someone who doesn’t believe in rational thought at all. So, I think this conversation serves no purpose.

Good luck having imaginary conversations with Jesus on how to guide your life.

-Alan

You believe in using Jesus to guide rational thought?

You are an idiot. You must have failed the antonym section of the SATs.

The fact that S&P gave Lehman a rating above junk status when it was tanking is proof that S&P is about as clueless as you are.

Wrong, Rory. Federal-government spending is 22% of GDP, and that is a much more accurate measure of the level of taxation because it includes the government’s deficit spending, which is merely taxation on the installment plan and more painful than current taxes because of the interest charges. So obviously, there is no room for more taxes without further burdening the productive sector of the economy and destroying more jobs at a time when so many of our fellow Americans are suffering the dire consequences of Keynesian economics.

Wrong! There are a growing number of Voluntaryists who believe and are working for the abolition of forcible taxation and replacing it with a regimen of freedom and voluntary cooperation. Their numbers are considerably greater than the number of individuals who wanted to abolish slavery in the 18th century, and after a long and arduous intellectual struggle finally succeeded.

Rory asks: “why would a small change in the impositions of the state to reduce the deficit issue’s weight on the economy necessarily be unthinkable? (those aren’t rhetorical questions, btw, they are real questions demanding real analysis and answers from smart Austrians)”

Rory, that is only one question and not a real one. Rather it is a Keynesian rhetorical question. Nevertheless, and I don’t claim to be a smart Austrian, but I will give you a common-sense answer. The reason the nation is in a recession is that government’s impositions in the form of taxes, deficits, which are taxes on the installment plan and more expensive than current taxes because of the interest required, regulations and monetary manipulations are already so heavy that they have stifled the private-sector’s vitality for growing the economy. Remember Rory, the private sector produces. Government revenues, regulations and its monetary manipulations are a burden on the private sector that only diminish productive economic activity, and can never produce net economic growth.