Krugman: America should fight space aliens, not the Taliban

Paul Krugman appeared on a recent Sunday on Fareed Zakaria’s GPS program. Mr. Krugman’s general thesis appeared to be something like the following:

If the Federal government were to cut spending now to reduce the debt and deficit, these cuts would have a negative, contractionary effect on the American economy and would increase the unemployment rate. Therefore, given that the unemployment rate is already very high, not only should the government not cut spending, it should actually increase it. Americans are misguided when they worry about the debt and deficit. Instead, they should worry about unemployment, prolonged stagnation, and another recession, and they should increase spending, even at the risk of running up the debt, to eliminate these threats.

What Mr. Krugman can’t seem to grasp is that it is precisely when he starts talking like this that Americans really start to worry about their pocketbooks. They worry that their taxes will be raised to pay for all this new government deficit spending. And they worry especially when they hear about the kind of spending that Mr. Krugman is recommending. According to Mr. Krugman, one of the best things that could happen to the United States would be if an announcement were made that the Earth was being invaded by space aliens:

“If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better [off.] … There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time...we need it in order to get some fiscal stimulus.”

Thus, an announcement that we were under attack from space aliens would spur the government to make massive increases in defense spending so that our armed forces could mobilize to ward off the invaders. Just as the massive spending of WWII put an end to the Great Depression, so Mr. Krugman argues, the new round of spending to fight imaginary space aliens would stimulate our economy and put an end to our current economic malaise.

This is the kind of amusing nonsense to which the Keynesian virus leads. We can well imagine some of the additional policy recommendations that Mr. Krugman might urge upon us. For example, space alien defense workers should be organized into unions by the SEIU, union dues collected, and these dues used to lobby the government to increase the wages and pensions of space alien defense workers.

But, what was most striking about Mr. Krugman’s space alien defense proposal was the fact that he did not even realize how utterly inconsistent it was with his position on the “Bush wars in Afghanistan and Iraq.” On the one hand, Mr. Krugman always has been and remains opposed to the Bush wars for economic reasons. For example, on Mr Zakaria’s program Mr. Krugman stated:

We came into [the current economic malaise] with more debt than I would have liked. We really in some ways are paying the costs of the Bush tax cuts and the Bush unfunded wars, which leave us with a higher starting point of debt.

On the other hand, Mr. Krugman states that he would be in favor of a massive increase in defense spending to mobilize against space aliens. According to standard Keynesian analysis, the significant increase in defense spending that resulted from the two Bush wars should have functioned as a stimulus that launched America into an era of prosperity, just as the massive spending of WWII ended the Great Depression and launched America into the prosperous decade of the 1950’s.

Mr. Krugman can’t have it both ways. If a massive increase in spending to fight off space aliens would be stimulative, then, so should have been the two Bush wars. If, on the other hand, the Bush wars were bad for the country because they were “unfunded”, then it would also be bad for the country now to engage in massive unfunded, deficit spending to fight imaginary space aliens or to promote any other Keynesian “make-work” stimulus project.

Thus, the most prominent Keynesian in the world today is revealed as nothing more than a jumble of contradictions and inconsistencies. Perhaps Mr. Krugman needs to spend a little more time thinking about the logical consistency of his positions and a little less time sitting on the couch watching old reruns of The Twilight Zone.