Krugman has no evidence

Krugman  wanted more stimulus:

 But we should bear in mind that the world would be in much better shape right now if economic orthodoxy had in fact been followed. In practice, all the heterodoxy with any real-world influence has been used by politicians to justify policies that have deepened the slump and increased suffering.



Forget what economists tell us, show me the evidence.  Look at the picture.  Wages are sticky and unemployment flip flops from high to low.  In 2009, Jan, when Obama took office the unemployment rate was already 90% of its way to the peak.  The election was in November 2008.  Krugman is asking Congress to respond in jan 2008 in the middle of a presidential election.  Impossible.

Could Congress have made the unemployment rate drop faster? The only time it has ever dropped faster was the 1980 recession.  In 2009 we had the debt rising faster than ever before in the series.  We have no evidence in the series that DC could have done better.

Find me an economist who proves DC could have borrowed and spent at a faster pace.  During the whole period since Obama took office until April 2010, the ten year rate was 3.5%, about one point over its fair rate.  Debt at those rates would have been useless.  At those elevated ten year rate we likely shifted 1% of nominal GDP into interest payments.

Some numbers:




We can put some numbers up here. Unemployment increased by 7%, a debt incurred by workers. DC increased debt by 35%, but it is 20% of the economy, is relative to the economy, DC incurred debt by 7%. The numbers match in the most constrained environment seen since the Nixon Shock. There is no proof, I can guarantee that, and I seem to be better at this than the economist.


Find me that economist, now. Its time for them to put up or shut up.