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Source link: http://archive.mises.org/9241/and-you-thought-krugman-was-bad/

And You Thought Krugman Was Bad

January 14, 2009 by

He was, and is, but he is not alone. Writing in Time magazine (January 19 issue, online here), Jeffrey Sachs, in an article called “The Case for Bigger Government,” makes the case for, what else–bigger government. We need to “restore national prosperity and security with a smartly rebalanced partnership between the public and private sectors.” We also need “expanded spending by government–for health care, climate change, energy security, education, infrastructure and peaceful diplomacy.”

To pay for this government: “We’ll need to raise taxes relative to GDP over time.” Taxes like those on “carbon emissions from coal, oil and gas to hasten our transition to sustainable energy.” Instead of letting gas prices tumble: we could “set a floor on prices at the pump and collect the difference between the wholesale and retail prices in federal revenues.” Sachs proposes taxing health care because “the public will also probably accept taxes on health care if they convincingly help save even more in private outlays on health insurance.” In the end, “the U.S. will probably have to follow Europe down the path of the value-added tax.”

And of course, “the Bush tax cuts for the rich should be rolled back this year, not next,” as if the poor actually pay any taxes. Any permanent tax cut by Obama “would be a huge error.” Even “short-term tax cuts are an unnecessary risk.”

No wonder I haven’t bothered to read Time magazine for 25 years.

The only sane thing Sachs says is that “the spending on the wars in Iraq and Afghanistan should be ended, not prolonged.” But is this because they are too expensive or because they are unjust wars?

{ 13 comments }

William Rader January 14, 2009 at 8:38 pm

The idea that government should be involved in every conceivable form of social program seems to be the direction that Obamaites are taking us. There appears to be no conception whatsoever of the fact that government can be detrimental to the public good. The fact is, I don’t see myself reading, watching, or ingesting the mainstream media in any manner, way, shape, or form for at least four more years (Time magazine represents a Barnum-and-Bailey world of thought. Has anyone seriously read this magazine over the past several decades)…unless, of course, the economy should totally fail. Then, I will be glad that I have studied Austrian economics and gained important insights from the writers at Mises.org. You are an important antidote to the persistently mindless blather that is injected into American minds in slightly sublethal doses on a minute-by-minute basis by the msm!

shanenwy January 14, 2009 at 9:09 pm

“The only sane thing Sachs says is that “the spending on the wars in Iraq and Afghanistan should be ended, not prolonged.” But is this because they are too expensive or because they are unjust wars?”

-Because they are Bush’s wars and this is a time for change.

Ned Netterville January 14, 2009 at 9:39 pm

You say Sachs is worse than Krugman? Oh yeah? Did Sachs ever refer to war–specifically WWII–as an “economic stimulus?” Krugman did just that in a New York Times op-ed published November 10, 2008, entitled “Franklin Delano Obama?”

William Rader January 14, 2009 at 9:54 pm

I agree with shanenry. This is a time of “change and greatness,” no matter where that change and greatness may take us!

Has Krugman ever heard of the Marshall Plan? Perhaps he stopped reading before he reached this point in US history!

Phil January 15, 2009 at 1:49 am

I need some sort of pill to make me relax, because the outright stupidity of these people is starting to seriously piss me off. They are not in a freaking ivory tower messing with play money, they are going to put my children into forced bondage and servitude.

The inescapable fact is that the write in this case has no concept of opportunity cost. The government produces nothing….. nothing… it has no freaking production…. This is basic economics. I dont understand how the ‘experts’ simply have no concept of this.

Okay, sorry for venting – Lord forgive my language. But it is simply ridiculous the level of stupidity that I have to endure with this crap.

Geir January 15, 2009 at 2:41 am

Sachs is preaching good-old socialism without using the word ‘socialism’. That is a smart move since this word is poison to most readers.

Depressions have become ‘recessions’.
Slavery is called ‘draft’.
Socialism has now been dubbed ‘rebalanced partnership between the public and private sectors’

This play with words has WORKED well for the Left for the last 150 years or so. It needs to be attacked.

Paulo January 15, 2009 at 4:10 am

Coincidentally, I stumbled upon this article while waiting for a dentist appointment (the only occasions when I have the “pleasure” of reading Times magazine…).

In the end, the only word I could remember was “taxes, taxes, taxes”. So this is what hope and change was all about…

What fascinated me most during this entertaining time, was that all the problems he listed (health case, education, etc…) are in bad shape, in large part, because of government intervention (of course, this part he didn’t mention)…

So the message is, the government does a crappy job and we need more taxes to get even crappier….

Paulo January 15, 2009 at 4:11 am

Coincidentally, I stumbled upon this article while waiting for a dentist appointment (the only occasions when I have the “pleasure” of reading Times magazine…).

In the end, the only word I could remember was “taxes, taxes, taxes”. So this is what hope and change was all about…

What fascinated me most during this entertaining time, was that all the problems he listed (health case, education, etc…) are in bad shape, in large part, because of government intervention (of course, this part he didn’t mention)…

So the message is, the government does a crappy job and we need more taxes to get even crappier….

fundamentalist January 15, 2009 at 8:22 am

Sachs: “The European strategy, with levels of taxation and government spending roughly 8% to 10% of GDP higher than in the U.S., has many successes to show for it: less costly and more reliable health care, the elimination of hard-core poverty, solid educational achievements, and social services that ensure better care for children and more flexibility for mothers and the elderly.”

As Sachs was Russia’s chief economic advisor after the collapse of the USSR, you can understand why Russia suffered economically so badly for a decade afterward. Like Krugman, all Sachs has to say is that we should imitate Europe. But Sachs doesn’t seem to have noticed important trends in Europe:

1) France and Germany elected leaders who promised to reform and rein in the state in the last elections. Europeans have known for decades that their socialist model is failing. They can’t afford a military of any size to defend themselves and they’re paying their bills with borrowed money. Social unrest exploded in France last year because more people are fighting for fewer jobs.

2) Healthcare is less costly in Europe than in the US because the state controls the costs. But US healthcare is as socialist as that in Europe; it’s just less sane.

3) Europe has eliminated hard core poverty by stopping most immigration. Immigrants contribute the most to our poverty rate. Apparently Sachs thinks it very unfair of us to share our wealth with our poor neighbors to the south. Still, comparing the lot of the poor in Europe with that of the poor in the US adjusted for the cost of living proves that the poor in the US are at least as well off as those in Europe.

4) Europe does have solid educational achievement. But he refuses to tell readers that they achieve it by limiting the opportunities of students. They reserve college for only a very small percentage of students who score the highest on exams. And before students leave what we would call junior high, the state determines whether they will prepare for college or go into a trade. The US tries to prepare every student for college and pays for college for students who clearly aren’t college material in order to give every student a second, third, etc., chance. That’s not to say that the US system is perfect. Far from it. But Sachs is consciously deceiving his readers by comparing two very different systems.

I can’t understand why socialists like Sachs cling to their ideology when they know they have to be dishonest in order to defend it.

Joseph Mises January 15, 2009 at 10:11 am

I wrote a quick commentary to Sachs on his University’s libertarian site.

check it out. comment.

http://columbialibertarians.blogspot.com/

I Hate Taxes January 15, 2009 at 10:24 am

Phil,

It’s not the stupidity of these people which is the problem, it’s their power.

They should not have power over us all. Let them be stupid in their own corner. Just don’t let them force their stupidity on us, this is the problem.

Michael January 15, 2009 at 1:23 pm

I find it rather disconcerting that the government, in plain view, meanders in the markets, distorts market price signals which inevitably confuses market participants. This confusion has obviously manifested into a global economic calamity. Then predictably, the state’s politicos promise to intervene again and their misguided promises are heralded as the proverbial “white knights” by the main stream media.

My question to the Mises audience: When does the cycle break?

FWIW, I canceled my Time Magazine subscription long ago.

William Rader January 15, 2009 at 3:11 pm

One more item, the title of this article should have an exclamation point following it.

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