Saturday, May 14, 2011

Paul Krugman predicted 7.3 unemployment with the stimulus

The other day, I found myself in another stupid Facebook debate with someone didn't know their facts.

I should be used to this by now. But it never fails to get to me when someone who leans to the left insists that I'm uninformed while saying something that's provably not true.

This all started when a friend posted a link to a Paul Krugman article.
I called Paul an idiot (my bad) and then stated why he was an idiot: That all of the spending he championed failed to bring down the unemployment rate.

Now I'd reprint the debate verbatim if I could. But as it happens far too often, a friend of my friend kept using insults until the original friend blocked us both from her Facebook account.
So by trying to correct the record with facts, suddenly, I'm the asshole. Even though I wasn't the one calling her other friend names.

I know. I know... I'm losing the point of why I wrote this.
Paul Krugman was for spending shitloads of money through the government. We all agree on this. He believed that it would result in a lower unemployment rate.
It is also true that Krugman was upset that only $787 BILLION dollars was being spent on the stimulus program. Krugman believed this to be small. Which makes sense.
I mean, if you're going to be a Keynesian economist, why wouldn't you believe in spending more money? Ideally, by spending 50 Trillion Dollars, we'd go into a huge economic boom that would never be matched! Right?

My friend's friend insisted that Krugman was right. That the stimulus was too small... which is why it had no effect. He said that Krugman readers would know that Paul predicted that the stimulus bill would fail to reduce the unemployment rate.
But Paul didn't say that.
In fact, Krugman said:
Unemployment is currently about 7 percent, and heading much higher; Obama himself says that absent stimulus it could go into double digits. Suppose that we’re looking at an economy that, absent stimulus, would have an average unemployment rate of 9 percent over the next two years; this plan would cut that to 7.3 percent, which would be a help but could easily be spun by critics as a failure.

Wow. A 7.3% unemployment rate would be spun into a 'failure' of Obama's $787 economic plan. Presuming, of course, that the president didn't have a fawning media that would change his every failure into rainbows and unicorns.

In case you didn't know this (or were arguing with me on Facebook), the nonfarm unemployment rate for April of 2011 was 9.0%.
I created this handy chart to show you what's the stimulus plan results have looked like, vs. the predicted results. Note that the uptick in unemployment in April has not been added.

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