7 ms·

I am tired of Krugman's Op-Eds. He keeps telling us that Government should spend more. Spend more on what? Government can pay one set of people to dig holes an

I am tired of Krugman's Op-Eds. He keeps telling us that Government should spend more. Spend more on what? Government can pay one set of people to dig holes and another set of people to fill them up. Surely, it would create jobs but is this what we want? We all agree that government needs to create 'productive' jobs otherwise there is no point in spending money. From his article, he notes that state government laid off school teachers (the productive people) when the budget ran tight instead of firing the bureaucrats who shuffle papers. Why does he expect that if Government were to spend more money they would somehow create productive jobs and not more bureaucracies which waste our hard earned money? Reminds me of this quote: "The curious case of economics is to demonstrate to men, what little they know, about what they THINK they can design."

earl 16y ago
If you read his columns, he's pretty explicit about what government should spend money on: (1) infrastructure projects, which will both increase employment now (particularly in the construction sector) as well as boost future productivity; (2) the social safety net, so people aren't homeless or starving (the people who receive these payments are also, as a bonus, nearly guaranteed to spend all of the money). Also, you complain about laying off school teachers while retaining bureaucrats. What exactly do you think the ratio is between the two? Because I'm guessing it's a lot higher than you expect, so given the size of the budget deficits, there wasn't a ton of choice.
- solutionyogi 16y ago
  You want Government to spend on Infrastructure, sure. Get ready to pay through your nose for that infrastructure. I am from NJ and they are trying to build up rail tunnel to connect to NY and here's the cost comparison: "Lotschberg Base Tunnel, world’s longest land tunnel, dug under a mountain at the peak of the world economic boom and completed in 2007; 21.5 miles long, about $4.5 billion (might be 1998 dollars, though); cost per mile: $209 million Gotthard Base Tunnel, when completed in 2017 will become the world’s longest railway tunnel; at least 35.4 miles plus additional tunnels, shafts and passages totaling 94.3 miles, about $10.2 billion; cost per mile: $288 million Channel Tunnel or “Chunnel”, connecting France and England, world’s longest undersea tunnel; 31.4 miles, opened 1994, cost $7.4 billion (might be 1985 dollars and the cost overruns did lead to bankruptcy); cost per mile: $235 million Wushaoling Tunnel, traveling through four regional fault zones; 13 miles long, opened 2006, cost $845 million; cost per mile: $65 million New Jersey-New York Mass Transit/ARC Tunnel, scheduled for completion in 2018; 3.5 miles long, cost $11-14 billion; cost per mile: $3.7 billion (I used $13 billion for this calculation)" From http://blogs.law.harvard.edu/philg/2010/10/08/new-jerseys-canceled-railroad-tunnel-in-perspective/ http://blogs.law.harvard.edu/philg/2010/10/08/new-jerseys-ca... Exactly how many jobs do you think infrastructure jobs will create? And what about all those people who are not in infrastructure sector? What about the school teachers which he keeps talking about? Also, how does increasing social safety net CREATE new jobs? You are simply handing out money.
  - kenjackson 16y ago
    Depending on traffic, those costs seem like they might be great deals. In any case, the money paid to people for infrastructure, results in those people spending the money, that (a) helps lift the economy (b) increases tax revenue, which results in more state/local funds to hire teachers.
  - yequalsx 16y ago
    When poor people get money they spend it. Almost all of it. Very little goes into a bank account. This increase in spending leads to more jobs for obvious reasons.
    - yummyfajitas 16y ago
      This is popular misconception. It sounds good, but it just isn't true. http://www-personal.umich.edu/~shapiro/TaxRebates.pdf http://www-personal.umich.edu/~shapiro/TaxRebates.pdf
      - anigbrowl 16y ago
        The reliability of that data is somewhat questionable, given that studies since then have taken issue with these findings, both in relation to the 2008 tax rebates (1) and later analysis of rebates paid in 2001 (2). 1. http://www.voxeu.org/index.php?q=node/1541 http://www.voxeu.org/index.php?q=node/1541 2. http://www.nber.org/papers/w10784 http://www.nber.org/papers/w10784 Whichever interpretation one places on it, it strikes me that the arguments for against payments are fundamentally identical to those regarding tax cuts.
        yummyfajitas 16y ago
        Regarding link 1, it reports spending as a % of household income. That's a silly way to report the data. A quick google search suggests the average household income of $70k in greater LA. Treating low income households as earning $15k (an overestimate) and treating all other households as earning $70k (an underestimate, since low income households are excluded), we find that high income households spend 2x more as a result of stimulus. (Rough numbers, but it's the best I can do. They don't provide all necessary data to get precise numbers.) Link 2 is gated, I can't get in. See also this paper, which shows the same effect happened in the current recession. http://papers.nber.org/papers/w16246 http://papers.nber.org/papers/w16246 (Ungated: http://ow.ly/2Fx1i http://ow.ly/2Fx1i )
- solutionyogi 16y ago
  I have spent last 30 minutes trying to figure out teacher vs bureaucrats ratio for NYC Department of Education. [They really make it hard to figure these things out] What's your best guess about the ratio? Total Employees: 135,000 (from: http://schools.nyc.gov/Employees/default.htm http://schools.nyc.gov/Employees/default.htm) Teachers: 80,000 (from http://en.wikipedia.org/wiki/New_York_City_Department_of_Education http://en.wikipedia.org/wiki/New_York_City_Department_of_Edu...) 40% bureaucrats. That's Forty Percent! And for Federal Department of Education, look at the org chart: http://upload.wikimedia.org/wikipedia/commons/6/6f/Ed_gl_org_chart.gif http://upload.wikimedia.org/wikipedia/commons/6/6f/Ed_gl_org... From the org chart, WH Initiative on Historically Black Colls & Univs Staff - What the heck is that? International Affairs Office - For what? And there are two more offices, Office of the Under Secretary and Office of the Deputy Secretary! This is worse org structure than I would have imagined at a Fortune 500. [BTW, this does look like successful job creation to me, though I am not sure about the value add] And despite having the highest spending per student, everyone still complaints about the US public school system. In closing, Sir, you simply have too much faith in government's ability to spend money wisely.
  - Anechoic 16y ago
    40% bureaucrats. That's Forty Percent! You seem to be assuming that there are only two types of employees in NYC schools - teachers and bureaucrats. There are in fact many types: teachers and bureaucrats sure, but also janitors & maintenance staff, security, IT staff, librarians, health staff, sports coaches, etc. WH Initiative on Historically Black Colls & Univs Staff - What the heck is that? http://www2.ed.gov/about/inits/list/whhbcu/edlite-index.html http://www2.ed.gov/about/inits/list/whhbcu/edlite-index.html International Affairs Office - For what? http://www2.ed.gov/about/inits/ed/internationaled/index.html http://www2.ed.gov/about/inits/ed/internationaled/index.html
    - anamax 16y ago
      > You seem to be assuming that there are only two types of employees in NYC schools - teachers and bureaucrats. There are in fact many types: teachers and bureaucrats sure, but also janitors & maintenance staff, security, IT staff, librarians, health staff, sports coaches, etc. How about some historical data on this ratio? (I'd agree that the security needs may be higher now, but IT is supposed to reduce the number of people needed and the others should be flat.)
- CWuestefeld 16y ago
  If you read his columns, he's pretty explicit about what government should spend money on But that's a huge part of the problem with his arguments (and that of many others sharing the same political views). If we gave this {money|power} to the government, they could do these wonderful things. Maybe they could do wonderful things, but by-and-large, they don't. They find some way to mess up the details. Perhaps they'll simply be mistaken about the end effects; or maybe they'll implement it badly; at best, a few years down the line, regulatory capture will ensure that the good that was intended is turned around, and the program is turned into a tool for the establishment's rent-seeking, rather than of benefit primarily to the people. I'm sure I sound cynical and jaded, but I challenge you to cite something -- anything -- that the government has done, that's more than a couple of years old that's an unqualified success.
  - kenjackson 16y ago
    I think the point that Krugman makes, and those of us with similar beliefs, is that gov't is willing to spend money to put people to work on projects that help the greater good. But these projects don't have to necessarily pay for themself. For example, gov't will build a bike trail. The private sector is a lot less inclined to, unless the trail goes through shopping center or is a toll trail. There's just different types of motivations. And in a recession where ROI is hard to get, gov't can be more effective in putting money back in the hands of people who will spend it.
    - dnautics 16y ago
      the categorical assumption there is that spending, no matter how responsible, is a good thing.
      - kenjackson 16y ago
        That's not an assumption stated or implied at all. I'm saying that motivation and metrics are different. The gov't needs to provide the same, if not more DD than the private sector (since return is harder to measure).
- yummyfajitas 16y ago
  (2) the social safety net, so people aren't homeless or starving (the people who receive these payments are also, as a bonus, nearly guaranteed to spend all of the money). False. Middle and upper middle class individuals [1] are the most likely to spend, the poor are least likely to spend. http://www-personal.umich.edu/~shapiro/TaxRebates.pdf http://www-personal.umich.edu/~shapiro/TaxRebates.pdf [1] The actual rich are not separated out by this study, the highest cutoff is $70k/year+ income. This group, and the $50-70k/year group are the most likely to spend stimulus money. [edit: fixed link. My bad. Thanks solutionyogi. Weird, 2 upvotes when I'm providing no evidence whatsoever. Herd behavior in politics articles, I guess.]
  - solutionyogi 16y ago
    The link is broken. Could you please update your post with correct link?
  - deleted 16y ago
    [deleted]
davidw 16y ago
> I am tired of Krugman's Op-Eds I certainly don't think they belong on Hacker News. Any more than mises.org or reason.com or other political/economics opinion sites.
- dnautics 16y ago
  they certainly stimulate discussion! Zing.
yequalsx 16y ago
"bureaucracies which waste our hard earned money" have lead to clean water, safe working conditions at factories, dramatic decrease in child labor, no lead in paint, a fairly safe food supply, etc. If government spends wisely then it can lead to more jobs, a better society, and a more secure future for the country. Of course, government might spend unwisely and have the opposite effect. It depends on the quality of the leadership of the government. That an investment into the country's infrastructure might lead to misguided projects is not an effective argument against the belief that proper investments in our infrastructure will pay off.
- solutionyogi 16y ago
  "If government spends wisely" That's the BIG 'If' right there. If wishes were horses....(fill in your own dream..)

earl 16y ago

If you read his columns, he's pretty explicit about what government should spend money on: (1) infrastructure projects, which will both increase employment now (particularly in the construction sector) as well as boost future productivity; (2) the social safety net, so people aren't homeless or starving (the people who receive these payments are also, as a bonus, nearly guaranteed to spend all of the money). Also, you complain about laying off school teachers while retaining bureaucrats. What exactly do you think the ratio is between the two? Because I'm guessing it's a lot higher than you expect, so given the size of the budget deficits, there wasn't a ton of choice.

solutionyogi 16y ago
You want Government to spend on Infrastructure, sure. Get ready to pay through your nose for that infrastructure. I am from NJ and they are trying to build up rail tunnel to connect to NY and here's the cost comparison: "Lotschberg Base Tunnel, world’s longest land tunnel, dug under a mountain at the peak of the world economic boom and completed in 2007; 21.5 miles long, about $4.5 billion (might be 1998 dollars, though); cost per mile: $209 million Gotthard Base Tunnel, when completed in 2017 will become the world’s longest railway tunnel; at least 35.4 miles plus additional tunnels, shafts and passages totaling 94.3 miles, about $10.2 billion; cost per mile: $288 million Channel Tunnel or “Chunnel”, connecting France and England, world’s longest undersea tunnel; 31.4 miles, opened 1994, cost $7.4 billion (might be 1985 dollars and the cost overruns did lead to bankruptcy); cost per mile: $235 million Wushaoling Tunnel, traveling through four regional fault zones; 13 miles long, opened 2006, cost $845 million; cost per mile: $65 million New Jersey-New York Mass Transit/ARC Tunnel, scheduled for completion in 2018; 3.5 miles long, cost $11-14 billion; cost per mile: $3.7 billion (I used $13 billion for this calculation)" From http://blogs.law.harvard.edu/philg/2010/10/08/new-jerseys-canceled-railroad-tunnel-in-perspective/ http://blogs.law.harvard.edu/philg/2010/10/08/new-jerseys-ca... Exactly how many jobs do you think infrastructure jobs will create? And what about all those people who are not in infrastructure sector? What about the school teachers which he keeps talking about? Also, how does increasing social safety net CREATE new jobs? You are simply handing out money.
- kenjackson 16y ago
  Depending on traffic, those costs seem like they might be great deals. In any case, the money paid to people for infrastructure, results in those people spending the money, that (a) helps lift the economy (b) increases tax revenue, which results in more state/local funds to hire teachers.
- yequalsx 16y ago
  When poor people get money they spend it. Almost all of it. Very little goes into a bank account. This increase in spending leads to more jobs for obvious reasons.
  - yummyfajitas 16y ago
    This is popular misconception. It sounds good, but it just isn't true. http://www-personal.umich.edu/~shapiro/TaxRebates.pdf http://www-personal.umich.edu/~shapiro/TaxRebates.pdf
    - anigbrowl 16y ago
      The reliability of that data is somewhat questionable, given that studies since then have taken issue with these findings, both in relation to the 2008 tax rebates (1) and later analysis of rebates paid in 2001 (2). 1. http://www.voxeu.org/index.php?q=node/1541 http://www.voxeu.org/index.php?q=node/1541 2. http://www.nber.org/papers/w10784 http://www.nber.org/papers/w10784 Whichever interpretation one places on it, it strikes me that the arguments for against payments are fundamentally identical to those regarding tax cuts.
      - yummyfajitas 16y ago
        Regarding link 1, it reports spending as a % of household income. That's a silly way to report the data. A quick google search suggests the average household income of $70k in greater LA. Treating low income households as earning $15k (an overestimate) and treating all other households as earning $70k (an underestimate, since low income households are excluded), we find that high income households spend 2x more as a result of stimulus. (Rough numbers, but it's the best I can do. They don't provide all necessary data to get precise numbers.) Link 2 is gated, I can't get in. See also this paper, which shows the same effect happened in the current recession. http://papers.nber.org/papers/w16246 http://papers.nber.org/papers/w16246 (Ungated: http://ow.ly/2Fx1i http://ow.ly/2Fx1i )
solutionyogi 16y ago
I have spent last 30 minutes trying to figure out teacher vs bureaucrats ratio for NYC Department of Education. [They really make it hard to figure these things out] What's your best guess about the ratio? Total Employees: 135,000 (from: http://schools.nyc.gov/Employees/default.htm http://schools.nyc.gov/Employees/default.htm) Teachers: 80,000 (from http://en.wikipedia.org/wiki/New_York_City_Department_of_Education http://en.wikipedia.org/wiki/New_York_City_Department_of_Edu...) 40% bureaucrats. That's Forty Percent! And for Federal Department of Education, look at the org chart: http://upload.wikimedia.org/wikipedia/commons/6/6f/Ed_gl_org_chart.gif http://upload.wikimedia.org/wikipedia/commons/6/6f/Ed_gl_org... From the org chart, WH Initiative on Historically Black Colls & Univs Staff - What the heck is that? International Affairs Office - For what? And there are two more offices, Office of the Under Secretary and Office of the Deputy Secretary! This is worse org structure than I would have imagined at a Fortune 500. [BTW, this does look like successful job creation to me, though I am not sure about the value add] And despite having the highest spending per student, everyone still complaints about the US public school system. In closing, Sir, you simply have too much faith in government's ability to spend money wisely.
- Anechoic 16y ago
  40% bureaucrats. That's Forty Percent! You seem to be assuming that there are only two types of employees in NYC schools - teachers and bureaucrats. There are in fact many types: teachers and bureaucrats sure, but also janitors & maintenance staff, security, IT staff, librarians, health staff, sports coaches, etc. WH Initiative on Historically Black Colls & Univs Staff - What the heck is that? http://www2.ed.gov/about/inits/list/whhbcu/edlite-index.html http://www2.ed.gov/about/inits/list/whhbcu/edlite-index.html International Affairs Office - For what? http://www2.ed.gov/about/inits/ed/internationaled/index.html http://www2.ed.gov/about/inits/ed/internationaled/index.html
  - anamax 16y ago
    > You seem to be assuming that there are only two types of employees in NYC schools - teachers and bureaucrats. There are in fact many types: teachers and bureaucrats sure, but also janitors & maintenance staff, security, IT staff, librarians, health staff, sports coaches, etc. How about some historical data on this ratio? (I'd agree that the security needs may be higher now, but IT is supposed to reduce the number of people needed and the others should be flat.)
CWuestefeld 16y ago
If you read his columns, he's pretty explicit about what government should spend money on But that's a huge part of the problem with his arguments (and that of many others sharing the same political views). If we gave this {money|power} to the government, they could do these wonderful things. Maybe they could do wonderful things, but by-and-large, they don't. They find some way to mess up the details. Perhaps they'll simply be mistaken about the end effects; or maybe they'll implement it badly; at best, a few years down the line, regulatory capture will ensure that the good that was intended is turned around, and the program is turned into a tool for the establishment's rent-seeking, rather than of benefit primarily to the people. I'm sure I sound cynical and jaded, but I challenge you to cite something -- anything -- that the government has done, that's more than a couple of years old that's an unqualified success.
- kenjackson 16y ago
  I think the point that Krugman makes, and those of us with similar beliefs, is that gov't is willing to spend money to put people to work on projects that help the greater good. But these projects don't have to necessarily pay for themself. For example, gov't will build a bike trail. The private sector is a lot less inclined to, unless the trail goes through shopping center or is a toll trail. There's just different types of motivations. And in a recession where ROI is hard to get, gov't can be more effective in putting money back in the hands of people who will spend it.
  - dnautics 16y ago
    the categorical assumption there is that spending, no matter how responsible, is a good thing.
    - kenjackson 16y ago
      That's not an assumption stated or implied at all. I'm saying that motivation and metrics are different. The gov't needs to provide the same, if not more DD than the private sector (since return is harder to measure).
yummyfajitas 16y ago
(2) the social safety net, so people aren't homeless or starving (the people who receive these payments are also, as a bonus, nearly guaranteed to spend all of the money). False. Middle and upper middle class individuals [1] are the most likely to spend, the poor are least likely to spend. http://www-personal.umich.edu/~shapiro/TaxRebates.pdf http://www-personal.umich.edu/~shapiro/TaxRebates.pdf [1] The actual rich are not separated out by this study, the highest cutoff is $70k/year+ income. This group, and the $50-70k/year group are the most likely to spend stimulus money. [edit: fixed link. My bad. Thanks solutionyogi. Weird, 2 upvotes when I'm providing no evidence whatsoever. Herd behavior in politics articles, I guess.]
- solutionyogi 16y ago
  The link is broken. Could you please update your post with correct link?
- deleted 16y ago
  [deleted]

davidw 16y ago

> I am tired of Krugman's Op-Eds I certainly don't think they belong on Hacker News. Any more than mises.org or reason.com or other political/economics opinion sites.

dnautics 16y ago
they certainly stimulate discussion! Zing.

yequalsx 16y ago

"bureaucracies which waste our hard earned money" have lead to clean water, safe working conditions at factories, dramatic decrease in child labor, no lead in paint, a fairly safe food supply, etc. If government spends wisely then it can lead to more jobs, a better society, and a more secure future for the country. Of course, government might spend unwisely and have the opposite effect. It depends on the quality of the leadership of the government. That an investment into the country's infrastructure might lead to misguided projects is not an effective argument against the belief that proper investments in our infrastructure will pay off.

solutionyogi 16y ago
"If government spends wisely" That's the BIG 'If' right there. If wishes were horses....(fill in your own dream..)