The good professor visits NPR Marketplace to tell us not to believe the government’s report on the stimulus savings jobs. Dr. Meltzer was singing a tune when he was sucking Bush’s bull and deficits didn’t matter and the dividend tax cut was going to create an amazing number of jobs (which it didn’t). What a douchebag – I guess par for the course when you are part of the AEI/W cabal. Hey doc, you have no credibility left – which means you have free reign on Marketplace (like Frum, Hassett etc.):
PAUL KRUGMAN: In fact, the $550 billion is basically dishonest. It’s full of gimmicks. If you took out the gimmicks, if you did an honest accounting, this is really more than a trillion dollar tax cut bill.RAY SUAREZ: Professor Meltzer, respond in general terms to Professor Krugman’s remarks, but also to his particular point about growing deficits and the lack of stimulative effect for specific cuts.
ALLAN MELTZER: Absolutely, I’ve been waiting to do it. Let me take up three different issues, three or four different issues. One is will it have an immediate effect, will it have some effect on the economy. Absolutely. Will it be huge? No. It’s a small tax cut, so it’s going to have a small effect. How big is a small effect? It’s about a half a percent in the GDP growth rate — not nothing, not bad. And that will add jobs in, for the economy. The second one, that you asked about is the deficit. I mean, let’s sort of put that into some perspective.
The deficit now is, or the debt, the U.S. public debt owed by the public is about 35 percent of our current GDP. So what would it be if it were terrible? Well, in 1945-46 it was around 100 percent of GDP, the economy didn’t go into the tank or collapse or do anything else. So there’s a lot of room in there for, for the deficit to get bigger without having any of the adverse effects.
Now, you might ask, why is that, because we’re going to have these big deficits. The answer is because we’re in a global capital market where the amount of securities out there is something on the order of 60, 70, 80 trillion dollars that we’re talking about. And we’re going to put in, a few hundred billion. It’s really a small amount. So you have to think that it’s going to have a big effect on interest rates and other things in order to believe the kinds of things that Professor Krugman is saying, and there just is no evidence, none what so ever, that those effects are very large.
Yep, Krugman was wrong – he always is. Meltzer, on the other hand? Brilliant. Deficits don’t matter (IOKIYAR), tax cuts create jobs (even if they don’t). Asshat.
