Monday, May 06, 2002
Well, the biggest thing I didn't miss on Friday was Paul "Line 47" Krugman's column. I could have predicted that it would be another anti-Bush screed. Actually, anyone who's read more than one of Krugman's columns could've guessed that.
Of course, Krugman's fans were not surprised when he went back to bashing the Bush tax cut.
How did a huge surplus turn into a huge deficit? The recession, the tax cut and terrorism ? in that order ? all played a role. Also, it now seems clear that the big surplus in 2000, almost twice as large as the surplus in the previous year, was an aberration ? that tax receipts were inflated by the technology bubble. In retrospect it's hard to believe that we locked in large, long-term tax cuts based on exactly one year in which the non-Social-Security budget was in significant surplus. (Thanks, Mr. Greenspan.)
I don't have the exact numbers (neither does Krugman) but I'd suspect that the $100 billion budget deficit that Krugman's complaining about is a result of the recession, terrorism and the tax cut -- in that order. When you think about the hundreds of millions of dollars sent to New York to help with the clean-up. The money lost from the stock market being closed for a week. The lost jobs. The grounding of the airlines. I don't see how you can realistically argue that the tax cut hurt the economy more than the terrorist attack.
I used the term "realistically" with regard to Krugman. That's probably where my problem with him lies. I live in the real world. Krugman lives in some ultra-liberal fantasyland.