Mary Theroux shows us how Krugman has decided to ignore the evidence (including the widely-respected academic work of Robert Higgs).
Justin Ptak already embedded the Paul Krugman video in a previous post. Krugman makes a similar argument in a recent blog post. Basically, Krugman echoes the notion that any spending is positive. This isn’t particularly new; DeLong explicitly made the point almost two years ago, “At this point, anything that boosts the government’s deficit over the next two years passes the benefit-cost test–anything at all.” It is, after all, what Keynes basically argues in The General Theory; even digging ditches and re-filling them would be beneficial.
An Austrian would tell you that no government spending passes the “benefit-cost test”. I argue as much in my article “Government Spending is Bad Economics“.
Some might think that we are wasting our time. Krugman, et. al., have basically fallen victim to the accusation they laid against us; as Krugman writes, “Nothing shakes the faith of a true believer.” I don’t think we’re wasting our time, though. The point shouldn’t be debunking “alien economics” for the sake of Krugman, rather for the sake of the students who run the risk of adopting an economic ideology which makes absolutely no sense. Our intellectual fight is not just for the present, but more so for the future.