Fact-Checking the Keynesian Version of History

On Sunday, June 27, New York Times columnist and Nobel Prize-winning economist Paul Krugman—I state his credentials at the risk of being accused of ad hominem—wrote this in his piece, The Third Depression:

… over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.

… officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, …

Rather than allude to unspecified speeches, I cite this data from the U.S. Government:

Budget of the United States Government: Historical Tables
Summary of Receipts, Outlays, and Surpluses


Source: http://www.gpoaccess.gov/usbudget/fy11/hist.html

Hoover was President from March 1929 to March 1933. His successor, Franklin Roosevelt, accelerated Hoover’s wild spending (and other interference in the economy by government), prolonging the Great Depression for well more than a decade.

For many important facts about government’s role in the Great Depression, see Great Myths of the Great Depression, by Lawrence W. Reed.

For an essentialized refutation of Keynesian theory, which underlies Krugman’s position, see my post (perhaps my best), The Jobs Job: I explain that Keynesianism, like Marxism, denies the role of the mind in production.

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