Krugman Takes Keynesianism into Twighlight Zone

It seems Krugman so believes in the Keynesian multiplier, that he really doesn't think it matter what the money is spent on:

"If we discovered that, you know, 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," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"

...

"There was a 'Twilight Zone' episode like this in which scientists fake an alien threat in order to achieve world peace,"

It turns out this was actually an Outer Limits episode, but no matter. If they really don't care what the money is spent on, why not just reduce taxes across the board? It would be far simpler and faster. I suspect because the real objective is redistribution, and lower tax rates across the board is regressive on a dollar basis even if proportionately the same. Too bad, but it highlights that old maxim I learned in my litigation--a dispute is never about what its most zealous disputant says it's about. In this case, the real wish of Keynesians is to redistribute wealth via the government, giving bureaucrats more power over the bourgeois. If it were otherwise it would be too easy to stimulate the economy in short order via their model of the economy.



Consider that the 2001 Bush tax cuts were a Keynesian idea to stimulate the economy. These are largely seen as a give-away to the rich, but here's the cuts:

• a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000.
• the 15% bracket's lower threshold was indexed to the new 10% bracket
• the 28% bracket would be lowered to 25% by 2006.
• the 31% bracket would be lowered to 28% by 2006
• the 36% bracket would be lowered to 33% by 2006
• the 39.6% bracket would be lowered to 35% by 2006

Of course, the economy never reached full employment, which is always the case in real time, as full employment is something people apply to the past; the present is always below its potential, seemingly. This is why spending more is so problematic, because it is very improbable that such spending will be temporary as opposed to part of the new baseline, all to work on fighting aliens, or whatever they do in the Department of Education.