To: Paul Krugman
CC: President Barack Obama
After reading your latest column “Hey, Small Spender” I feel like I don’t even know you any more. Granted we’ve never formally met but I’m wondering what planet you’re living on that you honestly believe that there hasn’t been a massive increase in government spending under President Obama.
While we both agree that Obama’s economic policies are not, in fact, working as many Democrats would like everyone to believe, that is where I must split in opinion with you, my Nobel Laureate friend.
You see, you and I are very different. You believe that government can never do or spend enough while I believe that government tries to do too much and spends way too much already. Your belief in Keynesian economic strategy, which the administration has followed (albeit not as strongly as you have suggested), has still increased our deficit to over $1.3 trillion for 2010. In addition, the Heritage Foundation found that since 2008 Federal spending per household has surged from $25,000 to $31,000. So I wonder what amount of deficit spending and national debt would satisfy your taxpayer funded thirst for bigger government? Would an additional trillion in deficit spending be enough? Maybe $2 trillion? Maybe $3 trillion?
If government isn’t already spending money hand over fist as you say, then how come I see all these fancy signs that have already cost taxpayers over $9 million just to promote the “work” that the $789 billion “American Reinvestment and Recovery Act” has done? While no single big new government project came out of the stimulus bills (ie. the Interstate highway system or the Hoover Dam) they have successfully saddled state budgets with future spending burdens, further subsidized unemployment, and allowed Congress to hand out favors to seemingly every politically connected special interest group imaginable. If that isn’t a good way to blow over three quarters of a trillion dollars then I don’t know what is!
You mention that tax breaks made up 40-percent of the stimulus plan–unfortunately for those of us that realize that lower tax rates help foster economic growth, these were not really tax breaks at all. These so-called tax cuts merely redistributed income to those who have little or no federal tax burden already and allowed people to make their houses more “Green.” Essentially these so-called tax cuts were just more government spending disingenuously disguised as tax cuts.
In fact it is the failed trial of Keynesian economic theory, as well as new arduous regulations, that have failed to bring down unemployment and reboot our economy.
As always Paul, I’ll be waiting on pins and needles to hear back from you.
P.S. I’m sure a big spender like yourself will enjoy the video that I have enclosed.
Budget & Tax Legislative Specialist
The Heartland Institute