Nobel Prize Winner Loves the New Budget

Paul Krugman, Nobel Prize winner and political columnist for the New York Times says "...this budget looks very, very good". If this is what passes for thorough budgetary analysis from a Nobel Laureate, the Nobel Prize is meaningless.

Here's what John McCain's political/economic adviser said about it:

"Well, I think this budget is politically and economically risky, and precisely because it doesn’t have enough spending reduction. If you look at what you’ve got, you’ve got about $2 trillion in deficit reduction.

That comes from $1.5 trillion in Iraq and Afghanistan reductions that are largely illusory. They pretend we would have spent $170 billion a year for a long time, and we’re not.

And then a $700 billion increase in revenues from a cap-and-trade program that has never even come close getting through the U.S. Congress. So that’s the deficit reduction, not obvious it’ll come to fruition.

And then the rest is about $1 trillion of tax increases on high-income individuals and businesses to fund $1 trillion in tax cuts that are already on the books from the stimulus bill, with "Making Work Pay," Earned Income Tax Credit, things like that.

So you’ve got a dynamic where they’re counting on things that are either illusory and hard to make happen politically — cap-and-trade and tax increases — to fund things that are already there. They didn’t cut spending. And that makes all the deficits that are presented best-guess estimates. The risks are all the upside."


Krugman's analysis is ALL POLITICAL. He likes the political goals of the budget, therefore the budget is "very, very good". He fails as an economist to actually look at how the numbers were put together, reserving such scrutiny only for the budget tricks of the previous administration.

Krugman should have to specify when he writes whether or not he has put his Nobel Prize winning economist hat on, so that we can more fairly judge the farce that the award was.