Krugman on Deficit Fears: Worse Than Iraqi WMD Hype

Columnist Paul Krugman played media critic, asserting the media is panicking the public with an empty threat - deficits are like vanishing weapons of mass destruction in Iraq.

New York Times columnist Paul Krugman played media critic on Friday, asserting that the media have gone from sensible to sensationalistic on the long-term federal budget deficit forecasts. The most notable part came when he insisted that the media's presentation of a deficit threat is a lot like the threat of Iraqi weapons of mass destruction (and will be just as damaging).

Isn't this a little odd in an article titled "Fiscal Scare Tactics"? Or was Krugman being self-referential?

And is this a great analogy, since the Iraqi WMD ended up missing, and the trillion-dollar deficits have hardly vanished? Krugman proclaimed:

To me - and I'm not alone in this - the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. Now, as then, dubious allegations, not backed by hard evidence, are being reported as if they have been established beyond a shadow of a doubt. Now, as then, much of the political and media establishments have bought into the notion that we must take drastic action quickly, even though there hasn't been any new information to justify this sudden urgency. Now, as then, those who challenge the prevailing narrative, no matter how strong their case and no matter how solid their background, are being marginalized.

And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Krugman has long declared that the "stimulus" spending Obama favored was a paltry sum, and he hasn't changed that line:

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

So he concluded deficit-reduction talk was just irresponsible and wrong-headed: "all the talk is about how to shave a few billion dollars off government spending, while there's hardly any willingness to tackle mass unemployment. Policy is headed in the wrong direction - and millions of Americans will pay the price."