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Wednesday, January 16, 2008
Samuelson Watch: This Week - He's Cynical, Yet Completely Lacking in Empathy
 I don't know where to start with this week's Samuelson column ("Lollipop Economics"). It's a mess. I guess the quality control person at the Post had the day off.
As expected, Samuelson devotes another chunk of prime pundit real estate to heft the long term fiscal imbalance on the shoulders of the Baby Boom generation and their impending retirement. This is, of course, just wrong, wrong, wrong. As has been documented numerous times, the fiscal challenges of the next fifty years lay squarely in the rapidly raising cost of health care.
The premise this time for his Social Security bashing is Washington's current obsession with fiscal stimulus. Samuelson's main point is that a $100 billion economic jump-start is nothing more than an election-year gimmick aimed at bribing voters. That Samuelson fails to recognize that good politics and good policy are not mutually exclusive is simple-minded, and absolutely cynical when literally thousands could be affected by it. However, he also objects to fiscal stimulus on the grounds that:
- Such a package is too small to do any good ("something much larger is needed")
- 1.1 million lost jobs is no big whoop ("a setback, but not a disaster")
- This recession is different than others ("Only time and patience will cure some economic problems")
- And besides, recessions are good ("[they] dampen prices and incipient inflationary psychology")
Wow. Logically Samuelson cannot simultaneous believe (A) and (C). And while (B) and (D) are complimentary, they underscore his total lack of concern for people.
UPDATE: I hope Congress listens to the Congressional Budget Office, and not Samuelson, when it says:
[T]o add three-quarters of a percentage point to the growth rate of GDP over a year, it might be necessary to increase the budget deficit for the year by close to three-quarters of 1 percent of GDP, or about $100 billion.
Posted by Craig Jennings
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