Tuesday, June 11, 2013

Why Is Macroeconomics So Hard: The WTF, Lying, Deceptive, Senator Edition

A scholar from a conservative think tank is called a liar, for 8 minutes, on national television, by a Democratic Senator.

The scholar had the temerity to cite what European governments did do in the most recent data.

The Senator said this was a lie, and produced a deceptive document in support. The Senator’s document showed the European government’s plan for what they plan to do.

That’s right: plans are facts, and facts are lies. You can’t make this stuff up.

The specifics are about fiscal policy. It’s a common position that European governments are pursuing contractionary fiscal policies, and that this isn’t a good idea when their economies are down. The scholar produced evidence that government spending was up rather than down, and thus presumably expansionary. The Senator produced evidence that the governments planned to cut spending in the future, and that this was somehow contractionary today. Sheesh.

Via seminal new Keynesian Greg Mankiw (now pilloried as a conservative) and Steve Landsberg who covered this in full, and said:

… Only sheer dishonesty — or perhaps an extraordinary failure of competence — can account for a discrepancy like this.

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