Monday, May 20, 2013

Don't worry about all that debt; after all "we owe it to ourselves"...

That's the main line of defense Keynesians and other proponents of larger government typically adopt when the issue of massive long-term debt is raised.  In fact, the leading Keynesian in the country, Paul Krugman, puts it like this:
According to Krugman: "...debt does not directly impoverish us, because it’s money we owe to ourselves."
Well, that's complete non-sense, as I propose to show via two links here.  The first is from an interesting blog entirely devoted to debunking the nonsense that pours out of Krugman on a regular basis in his NYT column.  Austrian School economist William Anderson, writing at Krugman-in-Wonderland, takes this argument apart.

The best refutation of the "we owe it to ourselves" argument that I've been exposed to came from Don Boudreaux during one of his appearances on Russ Roberts' superb weekly podcast, Econtalk.  If you're interested in this topic, I strongly recommend that you listen to Boudreaux, here.