July 02, 2012
When the war was done, the debt was paid back to the American citizens who owned it. They used the loot to buy things they put off purchasing during the war such as new automobiles and radios. They also used the windfall to purchase things such as refrigerators and televisions, which weren”t available before the wartime investment in technology and infrastructure. Since the national debt was almost entirely owed to US citizens, there was plenty of moolah to go around for purchasing such objects.
If you are an economist or have otherwise never done honest work, you are apparently required to believe that it doesn’t matter how you spend the “stimulus” money. This peculiar theorem is justified with the magical properties of something called “aggregate demand.” Paul Krugman is the noisiest hierophant of this odd idea, but it appears to have spread like herpes in a San Francisco bathhouse. Felix Salmon, an otherwise reasonable financial journalist, wants to use imaginary money to hire teachers, firemen, and worthless bureaucrats if we can’t find anything better for people to do. Unless the teachers, firemen, and bureaucrats are going to build factories capable of making things which can’t presently be made, such a plan seems doomed. We might better serve the nation by paying would-be “public servants” to stay at home, smoke cigarettes, and sniff glue; at least they won’t be bothering anyone and we won’t have to pay their retirement packages.
I don’t think the government should attempt to invest in new technological infrastructure. The small efforts the Obama Administration made have been in predictably virtuous-sounding baloney which will never work. I also don’t agree with Krugman that we should gear up for a war with space aliens. If we had serious people in the Pentagon rather than science-fiction nerds, they wouldn’t be asking for crackpot ideas such as the F-35. We’ll get no help from their lot; they appear to get all their ideas from the same third-rate science fiction that Krugman does.
To be useful in ending economic depressions, an investment must increase human power over nature. If stimulator ding-dongs in Krugmanistan were to suggest dumping a few hundred billion into something likely to generate new technologies and industries”for example, a space-colonization program or a project to create truly autonomous robots”I might take them seriously. Meanwhile, they look like a bunch of irresponsible kids who want to use the family credit card to buy hookers and booze.